Fire and Emergency and Earthquake Commission levies

Your Tower Insurance policy premium includes levies we collect on behalf of the government. We break these down and explain the most recent rate increases.

The Fire and Emergency levy

Fire and Emergency New Zealand (FENZ)

On 1 July 2017, The New Zealand Fire Service, National Rural Fire Authority and 38 rural fire authorities merged to become one organisation – Fire and Emergency New Zealand (FENZ). The creation of FENZ allows for a more coordinated fire and emergency service across New Zealand.

What is the Fire and Emergency levy?

The Fire and Emergency levy is paid on insurance for vehicles, contents and property – with a few exceptions such as Third party car insurance and Business liability insurance. This levy covers everything that the Fire Service does, including putting out fires, educating the public, attending vehicle incidents and animal rescue. We collect this levy on behalf of the government and pay it directly to FENZ.

Why did the Fire and Emergency levy increase?

The levy is the main source of funding for the new organisation. FENZ have said that the increase will help to maintain the current level of service provided, and to establish the organisation over the next four years.

How much did the levy increase?

The table below will help you understand how much your levy increased. If your Tower Insurance policy provides cover for fire damage, you’ll see a Fire Service Levy amount listed in your renewal certificate. This was sent to you with your renewal pack.

  2017/2018 levy * What does this mean for me?
Motor vehicle policies such as: Comprehensive Car Insurance or Third Party Fire & Theft $8.45 flat rate An increase of $2.37 per vehicle per annum
Residential policies such as: Premium, Plus and Standard House Insurance and Premium, Plus and Standard Contents Insurance 10.60c per $100 insured (insured amounts capped at $100,000 for residential buildings and $20,000 for contents)

Maximum levy payable per house is $106 and $21.20 for personal property
An increase of 3.0c per $100 insured (a maximum increase of $30 per annum for residential buildings and $6 per annum for contents)
Non-residential policies such as: Commercial vehicles over 3,500 tonnes and Farm Cover 10.60c per $100 insured (uncapped) An increase of 3.0c per $100 insured (e.g. an additional $300 per annum for those with insurance of $1 million)

*Levy amounts exclude GST


The Earthquake Commission (EQC) levy

What is the EQC levy?

The Earthquake Commission Levy (EQC) contributes to earthquake and other natural disaster cover. If you need to make a claim, this covers the first $100,000 (plus GST) of house damage, the first $20,000 (plus GST) of contents damage and damage to associated residential land, which is not covered by Tower Insurance.

Why did the EQC levy increase?

The EQC has two sources of income:

  1. premiums
  2. investment income from money held in the Natural Disaster Fund.

The current EQC premium rate of 15 cents is below the long-term breakeven costs of running the scheme. Increasing the levies will help rebuild the Natural Disaster Fund which has been depleted as EQC settles its claims from Canterbury and Kaikoura earthquakes.

The government decided to increase the EQC Levy from 1 November 2017. From this date there was be an increase in your levy which will apply to your premium.

How much did EQC levy increase?

The EQC levy increased from 15c to 20c per $100 of insurance cover, for all house and contents policies. The levy is capped at a maximum of $240 a year, up from the current maximum of $180. The table below will help you understand the increases. You’ll see the new EQC Levy amount listed in your renewal certificate. This was sent to you with your renewal pack.

  Pre 1 November 2017* Post 1 November 2017*
House insurance $150 $200
Contents insurance $30 $40
House and contents insurance $180 $240

*Levy amounts exclude GST