8 Feb 2013

Industry disagrees with proposed fire insurance changes

9:37 pm on 8 February 2013

The Insurance Council says planned changes to the way the Fire Service is funded won't stop freeloaders rorting the system.

An independent review of the Fire Service - commissioned by the Government - says the funding model needs to change to reduce opportunities for minimising levy payments.

It is recommending swapping the system from one type of insurance levy to another, to deter commercial companies from taking collective policies and lowering their levies.

But council president Tim Grafton says that doesn't change the fact that those who don't have insurance don't pay a levy at all.

"It's really disappointing that it hasn't really got to the heart of the problem of unfairness that exists under the present system. Currently hundreds and thousands of New Zealanders who do the right thing and properly insure their properties have to pay for freeloaders who don't insure, or under-insure to have their property protected."

The Insurance Brokers' Association says swapping the type of insurance levy won't make the funding system any fairer or more sustainable.

President Gary Young says commercial companies which want to minimise levy payments will still be able to do so under the planned change, and those without insurance still won't have to pay.

Mr Young says the Fire Service should be funded through either taxes or rates.

Labour Party internal affairs spokesperson agrees the Fire Service should be funded through rates, saying those who don't have insurance still won't have to pay a levy and that's unfair.

She says examples should have been taken from Australia, where the funding is tied to a property's value.

"It could be directly applied to rates as they have there and then we would ensure that everyone is levied fairly on the basis of the value of their property.

Ms Dyson says New Zealanders would be happy to fund the service in that way.