The Government has confirmed the fire service levy is to increase by 40%. This increase is a result of a decision to amalgamate urban and rural fire services and shift virtually all the resulting costs onto insurance.
An increased Fire Service Levy rate will come into effect from 1 July 2017.
When you get your invoice you’ll notice the increase. For personal insurances it’s not a big increase, but a rise all the same. The same cannot be said for business insurances, where the rise for larger commercial business accounts will be a substantial amount.
In addition from 1 July 2018, the levy will be reviewed yet again and its base broadened to possibly include insurance on offshore placed business and third party motor insurance.
Here’s what the new rates look like:
The most significant increase appears to the increases on Non-Residential buildings – think commercial and business property insurance.
- The new non-residential rate is 10.6c per $100 insured. This has the potential to significantly increase the levy payable for those with higher sums insured, as the rate of the levy is effectively increasing by 39%.
- The new rate is 10.6c per $100 insured (capped at $100,000 for buildings and $20,000 for contents) meaning a maximum increase of $30 for buildings from $76 to $106, and a maximum increase of $6 for contents from $15.20 to $21.20.
Motor Vehicles and Boat Trailers (less than 3.5 tonne)
- The new flat rate is $8.45 which is an increase of $2.37.
Motor Vehicles and Boat Trailers (over 3.5 tonne)
- The new rate is 10.6c which is charged as a percentage of the sum insured i.e. $200,000 x 0.106% = $212.00.
- The new rate is 10.6c and this is charged as a percentage of the boat sum insured i.e. $50,000 x 0.106% = $53.00.
Now that the FSL rates have been finalised, Insurers are locking down the new rates in their systems and finalising the changes made to their processes. From July 1 increases will apply.
Houses are getting more expensive to build…
Your Dwelling Insurance sum insured should reflect the actual cost to replace the insured property.
Insurers like Vero say that they are seeing evidence of significant increases in the cost of building materials and compliance for newly built houses. Accordingly they have raised the annual indexation rate applied to home building sums insured from 5% to 6.5%.
To keep contents sums insured in line with inflation, Vero has revised the annual indexation rate for contents from 1.6% to 1.5%.
These new indexation rates will apply to Personal and Rural home building and contents risk sums insured with an effective renewal date of 1 June 2017 onwards.
For any queries on the Fire Levy change or building costs increase, please drop me a Facebook message, email email@example.com or phone 022 066 3114. I am here to help you decipher the fine print and get truly independent advice on what insurance coverage will keep you safe and secure.