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The NSW government has announced a $160 million increase to the emergency services levy (ESL) – a change that is set to increase home and contents insurance premiums once the new levy takes effect in July.
In NSW, 14.6% of the cost of emergency services is paid for by the government, while the remaining percentage is funded through the ESL – a large majority of which is shouldered by home insurance companies. ESL can also be charged on other types of general insurance policies, including commercial property insurance, car insurance, and marine insurance.
Campbell Fuller, Insurance Council of Australia spokesman, said the levy increase is expected to result in a 15.2% spike in the ESL component of home insurance policies, possibly leading to more than 2,000 homeowners dropping their residential building insurance and an additional 9,000 to axe their contents insurance, finder.com.au reported.
“It will hurt consumer and small business finances and it will be detrimental to the levels of non-insured and underinsured in the community,” Fuller told Sydney Morning Herald.
