Don't shoot the messenger.

1 September 2017

EQC and FSL fees on our Star CamperCare policies.

As you’ll be aware the Fire Service (FSL) and Earthquake Commission (EQC) levies increased on 1 July 2017. They also changed the rules around collecting these levies.

We believe there are a number of more direct and equitable ways to collect these levies, ensuring that everyone pays their fair share. For instance, around 25%of the population aren’t insured and are probably over represented in crashes that the Fire Service attends.

When the insurance industry tries to fight against the machine by illustrating levy collection alternatives,we’re met with the status quo stone wall. This will be an ongoing battle and we’ll continue the good fight. But in the meantime, it is what it is.

What does this mean for us, you and your clients? As you know, Star CamperCare policies are really comprehensive and include additional cover for contents inside the motorhome or caravan. Because of this, we've been informed that we should not only be charging the Fire Service levy on the vehicle but also a Fire Service and EQC levy on the contents too, and to itemise these fees out on each policy.

We were aware of these levies and previously handled them as a yearly portfolio-wide adjusted entry, which was nice and easy. However, a bulk adjustment for these levies fails to identify every policy at a transactional level. So now we have to make it easier for big brother to know that every policy owner has paid.

So from 01 July you’ll notice both the FSL and EQC levies are itemised on each individual policy to show that it has been paid as calculated.

How are these new calculations worked out? You’ll know that the vehicle FSL levy is $8.45. For Star Camper Care, where the vehicle is under 3.5 tonne and there is the standard $3,000 contents cover, the FSL levy works out at $8.45 + FSL on contents ($3,000 X 0.106%= 3.18), for a total FSL of $11.63. But if the vehicle is over 3.5 tonne, its FSL is calculated against the sum insured and we still have to add the contents portion. 

The EQC levy is a calculation of $3,000 X 0.15% = $4.50 (which is adjusted if we have provided an increased contents value). 

Note that the EQC will again be increased from 0.15% to 0.20% ($4.50 to $6.00) from the 1st November 2017.

Putting the “better ways to pay” argument aside for the moment, at least this method showing fees paid to government is transparent, and identifies who paid what, should the Fire Service or EarthquakeCommission audit us.

We may not necessarily agree with it, however we have decided not to pick a fight on it at this stage.