Just like petrol, the government wants its pound of flesh from vehicle insurance. They do this in the form of government levies. You’ll soon read why your insurance premiums are the rate they are and how they could be a lot cheaper.

Whilst our hands are tied -- we can’t do anything other than be an unpaid revenue collector for the government -- we thought you would appreciate seeing how your insurance premiums are broken down. Don’t shoot the messenger!

 3 key taxes added to your premiums:

  1. Earthquake Levy
  2. Fire Service Levy
  3. GST (including GST on levies already imposed)

The Earthquake Levy and the Fire Service Levy help fund the Earthquake Commision and Fire and Emergency New Zealand (FENZ). And GST helps fund the rest of the government.

The Earthquake Levy is the lowest tax, and after a law change, this should no longer apply in 2019. At present this is calculated on the loose contents benefit portion of your policy. It costs $6.00 +GST, or $6.90 inclusive.

Next we have the Fire Service Levy is $8.45 +GST for each vehicle/caravan that weighs under 3.5tonne or 0.106% +GST of the value of the vehicle, if the vehicle weighs over 3.5tonne.

For example, a vehicle over 3.5tonne that is valued at $200,000 pays:
$200,000 x 0.106% (10.6c per $100 of insured value) = $212.00 +GST = $243.80 inclusive.

But that’s not all. The Fire Service Levy also applies to the loose contents benefit portion of your policy, which is another $3.18 + GST = $3.66 inclusive.

Finally we have GST which is 15%. This is added to your base policy fee, the Earthquake Levy and the Fire Service Levy. 

And yes, you probably just noticed that for the Earthquake and Fire Service levies, there is a tax on a tax: Levy tax + GST.

So far, this vehicle has additional taxes of $250.07. And if the base policy was $900 per annum, there’s also $135 in GST. So all up $385.07 in taxes to the government. 

We understand that taxes are what makes essential services happen and that those in need hopefully get support when needed. We take customer grief on the chin, but we’re also believers in transparency, hence sharing this information with you. 

Whilst all these taxes makes our work days a little harder, rest assured, keeping premium prices down is always our focus.