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Import­ant inform­ation on govern­ment levies

The New Zealand Government has increased the Fire Service and Earthquake Commission (EQC) levies added to your Vero insurance policies. 

Introduction

The New Zealand Government funds the Fire Service and Natural Disaster Fund through the Fire Service and Earthquake Commission (EQC) levies respectively. These levies are added to insurance policies and are included in the cost of your insurance.

Insurance companies like Vero collect and pass on these levies to the Government. The Government has reviewed the funding for both the Fire Service and Natural Disaster Fund and as a result the levies have increased. The Government is planning further changes to the levies over the next two to three years. We will be in touch with the details when this information is available. 

New Zealand Government Beehive Building

What's changing?

Changes to the Fire Service levy

On 1 July 2017, the Government increased the Fire Service levy to maintain The New Zealand Fire Service Commission’s current level of service and to establish Fire and Emergency New Zealand (FENZ) over the next four years. FENZ will allow for a more coordinated fire and emergency service across New Zealand by combining the New Zealand Fire Service, National Rural Fire Authority and 38 rural fire authorities.

Below is a summary of the Fire Service levy changes. Your renewal letter will outline the levy changes on your policy.

Personal insurance policies

The levy has increased from 7.60c to 10.60c per $100 of cover per annum on residential property (buildings and contents). The levy is capped at $100,000 of cover for homes and $20,000 of cover for contents. The levy will also apply to landlord’s furnishings benefit if your home insurance cover includes it.

Policy type

Previous maximum charge per annum

New maximum charge per annum

Change per annum

Home

$76

$106

$30

Contents

$15.20

$21.20

$6

Motor vehicles and boat trailers 3.5 tonnes or less

$6.08

$8.45

$2.37

Motor vehicles over 3.5 tonnes and boats

This levy is now charged at a new rate of 0.106% of the sum insured.

Rural and commercial insurance policies

The Fire Service levy is charged on the insured indemnity value for all non-residential property (e.g. buildings, plant, contents and stock) and is uncapped. The levy has increased from 7.60c to 10.60c per $100 of insured indemnity value. Home, contents and motor vehicles insured under a farm are subject to the same levies as personal insurance policies.

Marine insurance policies

The Fire Service levy applies to insurance policies for goods in transit within New Zealand (including storage), boat builders’ risks, boats, boat trailers and other watercraft.

Levy calculations can be tricky at times and a little confusing as to when they should be applied. We have put together a Fire Service levy calculation guide for you to keep as a handy reference tool.

Changes to the Earthquake Commission (EQC) levy

On 1 November 2017, the Government increased the EQC levy to rebuild the depleted Natural Disaster Fund following Canterbury and Kaikoura earthquakes. The levy also ensures that EQC Cover continues to provide first loss insurance cover for residential buildings, contents and land damage for New Zealanders.

Below is a summary of the EQC levy changes. Your renewal letter will outline the levy changes on your policy.

Personal insurance policies

The EQC levy has increased from 15c to 20c per $100 of insurance cover. The levy is capped at $100,000 of cover for homes and $20,000 of cover for contents.

Policy type

Previous maximum charge per annum     (excl. GST)

New maximum charge per annum (excl. GST)

Change per annum (excl. GST)

Home

$150

$200

$50

Contents

$30

$40

$10

Home and Contents

$180

$240

$60

Household property while in transit

Our EQC levy calculation guide will help you work out the new rate. 

Commercial insurance policies

Commercial property will have the EQC levy applied to any residential components. Examples include rest homes, body corporates or homes on farms. The levy has increased from 15c to 20c per $100 of insurance cover. Home and contents insured under a farm are subject to the same levies as personal insurance policies.

Marine insurance policies

The EQC levy applies to insurance policies covering household property while in transit and storage within New Zealand. Levy calculations can be tricky at times and a little confusing as to when they should be applied. We have put together an EQC levy calculation guide for you to keep as a handy reference tool.

Further details on the EQC levy can be found on the Earthquake Commission (EQC) website.

Some helpful ways to manage your Personal Insurance premiums 

While recent events remind us of the importance of having insurance cover, there are some steps you can take that may help to manage your premiums.

You can manage your premiums by

  • adding a voluntary excess to your policy.
  • excluding under 25 year old drivers from your motor vehicle policy. Conditions apply.
  • having monitored fire and security alarm systems to receive a discount on home and contents insurance. Conditions apply.
  • having two or more insurance policies with us to receive a discount. Conditions apply.

Do you have enough cover?

It’s important that you have enough cover if you ever need to repair or rebuild your home or replace possessions. We encourage you to check:

  • whether your home is insured for the correct amount based on an accurate rebuild value. The Cordell Calculator may help you to work it out.
  • that we are aware of the correct square metre floor area of your home.
  • that your possessions are insured for the correct amount. It’s easy to update the value of the cover you currently have.

Increasing your sum insured may not cost as much as you might think. Please talk to your broker or adviser for details.

Flexible ways to pay

  • a range of flexible payment options including fortnightly, monthly, quarterly, six monthly or yearly.
  • a payment method that’s convenient for you including credit card, direct debit, online banking or pay by cheque.

Extra cover for no extra cost 

If you have one of our comprehensive home policies and you qualify for SumExtra:

  • you’ll get up to 10% more cover if your home is damaged or destroyed in a natural disaster and the sum insured amount isn’t enough to pay for repairs or a rebuild.
  • if your home is damaged or destroyed by any insured event other than a natural disaster, you’re covered for the costs to repair or replace your home even if the cost is more than your sum insured amount.

Don't forget to update us every three years on what the estimated replacement cost of your home is to qualify for SumExtra. The Cordell Calculator on our website may help you to work it out.

We're here to help

If you have any questions about these Government levies, please chat to your broker or adviser or get in touch with us.

Contact us

For full details on the benefits of your insurance cover, have a look at your personalised schedule and the policy wording.

Download the policy wording