The Fire Service Commission was recently challenged by Vero and the Insurance Brokers Association over the methods for calculating Fire Service Levies, which they claim were outdated and unfair. The insurance industry had devised schemes for minimising the levies, which were previously found by the High Court and the Court of Appeal to be legal. So the Fire Service Commission appealed again to the Supreme Court. The Supreme Court overturned those decisions, and the result will be more money flowing from insurance policy holders to the Fire Service.
The court has acknowledged the ‘free rider’ problem, without doing anything to help. “Failure to insure against fire did not change the availability of the fire service in the event that the property caught fire,” the Court said. In other words, not having insurance, and therefore not paying the fire service, doesn’t mean they won’t turn up to put it out.
It obviously has to be this way, as personal safety is non-negotiable. We are lucky in New Zealand to have a well-trained and highly capable fire service. They do a fantastic job, despite having limited resources. Personally, I have long thought Fire Service Levies should be paid by every property owner, perhaps as part of local body rates – but that’s for another discussion.
While those who choose not to insure property avoid paying their fair share of Fire Service Levies, they also miss out on all the benefits of having their property insured. Part of our work is to help our clients ensure they have appropriate and effective insurance for their assets. Our clients choose WealthDesign as their preferred insurance broker, because we work with them to select only the cover that is really needed, and with wise use of excess options, we help make sure premiums are affordable.
For a competitive general insurance quote along with sensible, local, personalised advice, call us.
Regan Thomas