EQC and Fire & Emergency levies explained
Your Tower policy premium includes levies we collect on behalf of the government. We break these down and explain any recent changes and rate increases.
What is a levy?
Tower collects levies (or fees) on certain insurance premiums on behalf of the government for certain natural disasters and for fire and emergency services. For more details, see below.
Earthquake Commission (Toka Tū Ake EQC) levy
The EQC levy funds a government insurance (called EQCover) and it's there to support all New Zealanders if there’s certain natural disasters. Everyone pays the levy through their house and landlord insurance, so Toka Tū Ake EQC can be ready to help if something major happens.
Fire & Emergency New Zealand (FENZ) levy
The FENZ levy is paid through Tower car (comprehensive and third party, fire and theft), contents, house and landlord insurance – with a few exceptions such as third party car insurance and business liability insurance. This levy contributes to New Zealand's fire and emergency services.
Who are the EQC?
The Earthquake Commission – Toka Tū Ake (or EQC) is government insurance set up to support New Zealanders in the event of certain natural disasters.
If your home or land is damaged due to an earthquake, landslip, volcano, tsunami, or hydrothermal activity, the EQC will pay out a certain amount to help you rebuild or repair it. Private insurers, like Tower, pay the rest of any claim for damage to your home.
The EQC is funded through a government levy that’s collected through house and landlord insurance premiums and passed on directly to the EQC.
Changes to Toka Tū Ake EQC
From 1 October 2022, the government are making changes to the EQC that will make a difference to every New Zealander with house or landlord insurance.
EQC cap increase
The government are doubling the maximum amount the EQC will pay out for claims (the EQCover) to $300,000+GST, if there’s a certain natural disaster that causes damage to your house.
EQC levy increase
Your premium includes an EQC levy that all insurers collect on behalf of the EQC. This levy will increase from 1 October 2022 to fund the increase to the EQC cap.
EQC changes impact everyone.
Everyone buying or renewing house or landlord insurance will see changes to their premiums from 1 October 2022.
Renewing soon? Check My Tower for details
Once you receive your Tower renewal pack, you can log in to My Tower and review the details of exactly what’s changing for you.
Watch this video to find out more about the EQC and their upcoming changes
EQC Frequently Asked Questions
The government has increased the maximum amount of EQCover they will pay for claims following certain natural disasters. To fund this, they have increased the EQC levy. This is a government-led change. Tower, like all general insurers in New Zealand need to collect this levy and pass it on to the Toka Tū Ake EQC.
The levy will increase on 1 October 2022. How much you pay depends on your sum insured. For homes where the sum insured is between $187,500+GST to $300,000+GST or more, you’ll see a $180+GST increase in your EQC levy. For homes where the sum insured is less than $187,500+GST you may see a reduction in your EQC levy.
No, your policy benefits and limits are still the same. The only difference is the that the EQC will pay for the first $300,000(+GST) of your claim following certain natural disasters to your house and Tower will cover the rest up to your sum insured.
Yes, Tower will continue to manage all your claims, including claims following earthquakes or any other EQC covered natural disasters.
Yes. Every house and landlord policy in New Zealand is affected by this change. All general insurers in New Zealand who offer house or landlord policies will be implementing the government’s new mandatory EQC levy on new and renewing policies.
The government has increased the amount of EQCover for claims following certain natural disasters. While some areas, like Wellington and Christchurch have a higher earthquake risk, the EQC protects all New Zealand for events like earthquakes, tsunami, volcanoes and geothermal activity. So, the new levy applies to all house and landlord policies in New Zealand.
The change in the EQC levy is just one part of your overall premium. There are lots of things that can cause your premiums to go up or down, like:
- Any changes made to your policy, like updating your sum insured, adding or removing optional benefits or features, or changing your excess.
- Your discounts like multi-policy discounts and no claims bonus.
- Specific risks at your property, like floods, earthquakes, crime and storms.
- Higher claim costs due to inflation related price increases, like the cost of building materials and labour.
- Our costs to make sure we can look after you when you need it most.
- Government Tax; If your overall premium changes, GST changes too.
Find out more about understanding your premium here.
We understand that any increase in premiums is tough. However, there may be some ways you can save on your insurance.
How much is the levy?
If your Tower policy provides cover for fire damage, you’ll see a FENZ levy amount listed in your renewal invoice. This is sent to you with your renewal pack.
The levy is passed on directly to Fire and Emergency New Zealand to help fund the services they provide. How much you pay depends on the product and asset that you have. Don’t worry, we’ll work out the calculations for you ahead of your renewal.
If you’d like any more information about the FENZ levy visit the Fire and Emergency New Zealand website.