Fire & Emergency Levy Changes - What You Need to Know
Fire and Emergency New Zealand (FENZ) Levy Changes – What You Need to Know
From 1 July 2026, significant changes to the Fire and Emergency New Zealand (FENZ) Levy will come into effect. The new levy system represents the most substantial reform of the FENZ funding model in decades and will affect many insurance policies across New Zealand. The changes are designed to create a fairer and more sustainable funding model for Fire and Emergency New Zealand, ensuring the organisation can continue providing fire, rescue, medical response, hazardous substance, and natural disaster response services throughout the country.
What is the FENZ Levy?
The FENZ Levy is a government-imposed charge collected through insurance policies and passed on to Fire and Emergency New Zealand to fund its emergency response services. Currently, the levy is primarily based on the amount of fire insurance purchased. Under the new system, the levy will apply more broadly across a wider range of insured property and vehicle risks.
When Do the Changes Start?
The new levy rules apply to:
- New policies incepting from 1 July 2026
- Policies renewing from 1 July 2026
- Certain policy adjustments made after this date
The levy is collected by insurers and remitted to FENZ.
Key Changes from 1 July 2026
Levy Based on Sum Insured
One of the most significant changes is that the levy will generally be calculated using the sum insured shown on the policy schedule, rather than an indemnity value or estimated replacement cost. This provides greater transparency but may increase levies on some policies where higher sums insured are selected.
Commercial Property Most Affected
Many commercial property owners will notice the largest change.
Previously, the levy system often relied on fire sums insured and various exemptions. Under the new model:
- Commercial buildings are generally levied based on their insured value.
- First-loss policies require special levy calculations.
- Mixed-use properties (for example, buildings containing both commercial and residential occupancies) have specific allocation rules.
- Multi-tenanted properties may require separate consideration for residential and commercial portions.
Vehicle Levies Simplified
A standard levy now applies to most vehicles regardless of value.
Examples include:
- Light vehicles
- Heavy vehicles
- Trailers
- Boat trailers
- Third-party-only vehicle policies
The levy is generally $25 per vehicle or trailer.
This means owners of lower-value vehicles may see an increase, while owners of higher-value vehicles may notice little change.
Boat Owners – Good News and Bad News
The vessel itself remains exempt from the FENZ Levy.
However:
- Boat trailers attract the vehicle levy.
- Goods carried on vessels may attract levy treatment depending on what is being insured.
- Personal property insured while aboard a vessel may also attract levy depending on the type of property insured.
For many recreational boat owners, the impact is likely to be limited to the trailer levy.
Contract Works Changes
Contract Works insurance remains subject to the levy, however an important improvement has been introduced.
The previous issue of potential “double dipping” where levies could effectively be charged under both Material Damage and Contract Works arrangements has been removed.
This should result in a fairer outcome for many construction projects.
Livestock and Forestry Included
The new framework expands levy collection into areas previously outside or unclear under the old system.
This includes:
- Livestock insurance
- Forestry insurance
- Certain rural assets
These sectors may see levy charges where none previously existed.
Important Exemptions
Several classes of property remain exempt from the FENZ Levy, including:
- Ships and vessels (including trailer boats themselves)
- New Zealand Defence Force property
- Certain cultural and heritage collections
- Import and export goods in transit
- Mines and mining equipment
- Certain terrorism cover attached to fire policies
- Deductible buy-down policies
- War and strikes cover for aircraft
What Stays Largely the Same?
While the levy framework is changing significantly, several common insurance classes remain relatively unchanged:
- Residential buildings
- Household contents
- Contract Works insurance
Most homeowners should notice only modest differences in levy calculations compared with commercial property owners.
Travel Insurance Impact
Certain travel insurance policies may be affected where personal property is insured within New Zealand.
This particularly includes:
- International students studying in New Zealand who purchase cover through New Zealand insurance providers.
Why Are These Changes Being Made?
The previous levy system had become increasingly complex and was often criticised for:
- Inconsistent treatment of similar risks
- Difficulty calculating levies on modern insurance products
- Gaps where some insured assets contributed little or nothing toward emergency service funding
The new framework aims to:
- Modernise the levy system
- Improve fairness between policyholders
- Provide more stable long-term funding for FENZ
- Align levy calculations with contemporary insurance products and policy structures
What Does This Mean for Policyholders?
The impact will vary depending on the type of insurance you hold.
You May See Little Change If You Have:
- Standard home insurance
- Household contents insurance
- Small personal insurance programmes
You May See Larger Changes If You Have:
- Commercial property insurance
- Mixed-use buildings
- Large vehicle fleets
- Rural insurance programmes
- Livestock or forestry insurance
- Complex commercial insurance structures
Some businesses may see increased levy costs, while others may benefit from the removal of previous anomalies and duplicate charging arrangements.
How Bay Insurance Can Help
The FENZ Levy changes introduce new rules and calculations that can be difficult to interpret, particularly for commercial property owners, landlords, body corporates, rural businesses, transport operators, and organisations with complex insurance programmes.
If you are unsure how the new levy rules may affect your insurance costs, our team can review your policies and explain any changes before your next renewal.
Need Advice?
Contact Bay Insurance Brokers today and we’ll help you understand how the new FENZ Levy framework applies to your insurance programme.
This article is intended as general information only and does not constitute legal or insurance advice. Levy calculations may vary between insurers and policy types as further guidance is released by Fire and Emergency New Zealand and the insurance industry.
More Information Here
Click the link below for more information.
https://www.fireandemergency.nz/about-us/the-fire-and-emergency-levy/levy-rate/