Yahoo Finance $290 insurance price cut gives millions of Aussies cost-of-living relief
NSW households are set to save up to 15 per cent on their home insurance premiums.
Home insurance premiums will soon become cheaper for NSW residents, providing hundreds of dollars in cost-of-living relief to households.
NSW Premier Chris Minns announced the government would scrap the Emergency Services Levy from home insurance premiums.
The levy is a tax that helps fund emergency services’ responses to fires, bushfires, storms, floods, transport accidents and other emergencies.
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Under the current system, the levy is charged on all home insurance policies, meaning only those with insurance pay. More than 17 per cent of households across NSW do not currently have home and contents insurance.
Premiums have skyrocketed by 50 per cent in high-risk parts of Australia - such as those prone to flooding - and 28 per cent on average in the year to March.
The Insurance Council of Australia found that scrapping the levy would make home insurance up to 15 per cent cheaper, on average, for NSW residents.
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The average home and contents insurance policy is currently $160.75 per month or $1,929 per year, according to Finder. This means households could save up to $289 per year.
Minns said the reform was “not easy” but was “the right thing to do”.
“For too long this has been in the too-hard basket for NSW,” Minns said.
“But, as we face the threat of more natural disasters, we have a significant opportunity to make the system fairer [and] more sustainable for the future.”
The Insurance Council of Australia welcomed the reform and said it was “great news” for anyone taking out insurance in the state.
“Reforming the ESL will be a major win for insurance affordability in New South Wales, an issue that is being discussed around kitchen tables and in small businesses around the state,” CEO Andrew Hall said.
State budget papers estimated insurance customers would pay $1.3 billion through the levy this year.
The NSW government plans to redistribute the cost across the state and will launch a consultation with stakeholders and experts in the industry on the reform.
NSW is the only state that funds its emergency services with a levy. All other mainland states have removed similar levies, while Tasmania has announced a process to reform its levy, which applied to commercial insurance only.
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