The main insurer of churches in New Zealand will no longer cover acts of God – namely, damage from earthquakes.

More than 600 churches are likely to be affected by leading insurer of faith organisations Ansvar NZ's decision to stop providing them with earthquake cover.

Ansvar has handled $700 million of quake-related claims since Christchurch suffered its first big quake in September last year. It collected just $35m in premiums over the same period.

Anglican Insurance Board chairman Don Baskerville said the move to refuse any new earthquake cover, and to renew existing cover only until December 1, could lead to some churches being sold to private investors.

"If it is a small town and there are three churches, we may have to speak to the other two denominations and work out which one we would use.

"The other ones could be sold to become a restaurant," he said.

At-risk churches that sat unused and could not be sold could face demolition.

"But the issue is whether churches can afford to insure their building. If they can't, then they wouldn't be able to rebuild should it come down in an earthquake."

Mr Baskerville estimated 300 Anglican, 150 Presbyterian, and 50 Methodist churches would be affected, along with those of other denominations, including all Catholic churches in the South Island.

Ansvar was established in 1982. It was bought 16 years later by British-based The Ecclesiastical Group, insurer of Westminster Abbey and St Paul's Cathedral.

The group's chief executive, Michael Tripp, said in a statement that the Christchurch earthquakes had produced the biggest losses in its history. "We have therefore taken the decision to cease writing any new business from our Ansvar subsidiary in New Zealand."

Ansvar will establish a team by the start of the new year to explore quake cover in other markets, such as Lloyd's of London.

That would leave denominational insurance boards to decide whether they wanted to fragment their business between two or more insurers.

The Anglican Insurance Board will meet Ansvar senior managers in Wellington next week.