Firstly, what is the NSW Emergency Services Levy?
The NSW ESL provides funding for emergency services in NSW, including Fire and Rescue NSW, the NSW Rural Fire Service and the State Emergency Service all of which help keep out community safe. The levy is collected by insurers on behalf of the NSW Government and is included in residential and commercial property policies and motor insurance policies.
What’s changed with the NSW ESL?
In December 2015, the NSW Government announced it would abolish ESL from insurance premiums and replace it with a new Fire and Emergency Services Levy (FESL) to be paid alongside council rates.
Insurers have been preparing for the transition to the FESL for more than a year. On 30 May 2017, the NSW Government announced new plans to indefinitely defer the abolition of the NSW ESL collection on insurance premiums.
How will NSW emergency services be funded now?
As a result of the NSW Government announcement, ESL is now reinstated on insurance premiums and insurers are required by law to continue to collect the levy on behalf of the NSW Government.
What does this mean for policy holders?
In line with government legislation, we will collect ESL as part of your insurance premium until further notice.
What happens if you didn’t pay NSW ESL last year, what will you pay this year?
All eligible policies will now have the ESL included in their total premium in line with the new legislation passed by the NSW Government. The amount of collected ESL is passed to the NSW Government and used to fund emergency services in NSW.
How will you know how much ESL you will be paying on your insurance policy?
You will receive an insurance schedule or statement when you renew, purchase or amend your insurance cover. The NSW ESL charge is clearly itemised on your insurance schedule and is a percentage of your base premium. Insurers collect these levies on behalf of the NSW Government.
Why has your insurance premium increased?
Premiums are regularly reviewed and take into account a number of risk factors such as location and construction, claims history, type of cover selected and indexation of sum insureds, as well as business expenses, including operating and reinsurance costs.
If you have any questions about the changes to ESL or the amount of ESL that applies to your policy, you should speak to your insurance company or insurance broker directly.
This article appeared in our June 2018 newsletter. Author: Stephen Mason