Supreme Court Decision May-15
In May, a Supreme Court ruling clarified the way in which Fire Service levies are calculated and charged.
This decision affects property owners who had arranged insurance cover for property in multiple tiers.
Fire Service Levies are calculated on the indemnity value of a property. Some New Zealand property owners legitimately reduced the fire levy payable by reducing the indemnity value of the property. The ruling means that these property owners will no longer be able to set a reduced indemnity value on properties they own.
You may have outstanding levys
If your insurance programme is currently structured in multiple tiers you may now have outstanding levys due from the date of the decision (May 13, 2015) and will certainly have additional levys due from your next renewal. It does not apply retrospectively and if you have concerns about the change get in touch with your broker.
What's all the fuss?
The ongoing debate over the fire service levy
If you’re a property owner and insured – you are charged a fire service levy, it’s added in to your insurance bill and raises over $330m annually for the Fire Service.
While funding the Fire Service is of paramount importance there is an ongoing debate regarding how fair the levy is. Generally insurance brokers and the industry as a whole are of the opinion that:
- All New Zealanders need an emergency response service and its funding should reflect that fact
- The current system means only those who insure their assets insurance pay for the fire service
- Failure to insure does not change the availability of the fire service.
- Uninsured or under-insured property owners do not make a fair contribution to the costs of the service.
General Taxation Fairer?
There is also the argument that around 26% of the Fire Service’s annual costs relate to non-fire activities. And that a general taxation would be a fairer way to fund the Fire Service.
We'll keep you up to date
It's a debate that has been going on for many years and we don't expect to see any significant changes soon. But we'll keep you up to date on any incremental changes that may affect you as an insured property owner.
About the AuthorName: Guy Worsley
I am a Commercial Broker at Rothbury Auckland. My 18 years experience both in New Zealand and international markets coupled with my high service standards means that I can help clients navigate their way through the complicated insurance…
I am a Commercial Broker at Rothbury Auckland. My 18 years experience both in New Zealand and international markets coupled with my high service standards means that I can help clients navigate their way through the complicated insurance landscape.
My clients come first. It’s vital to spend time understanding my clients’ business before I provide advice. This advice is assured as I have wide knowledge and experience of liability, professional risks, property motor and marine insurance.
Plus, I am proud of my proven ability to negotiate win : win claim solutions and advise on technical insurance matters.Close