Could NSW Emergency Services Levy Reform Make Insurance Fairer?

The current system has long been criticised because it makes insurance more expensive for the very people trying to protect their homes, contents, farms or businesses. According to the analysis, the levy can add up to 18 per cent to household insurance premiums and up to 34 per cent for businesses before other taxes are applied. That extra cost is particularly difficult in disaster-prone communities, where base premiums are already higher because of flood, storm, bushfire or other natural hazard exposure.

The potential savings vary widely. The modelling suggests households in higher-risk regional areas such as Lismore could save hundreds of dollars a year, while some small and medium-sized businesses could see much larger reductions depending on their risk profile and current premium structure. Examples cited include savings for a small bakery, a restaurant and a livestock farm, with the largest benefit flowing to businesses that currently face heavy insurance-based levy costs.

For Insurance Online readers, the key issue is not only whether premiums fall, but whether more Australians can afford adequate cover. The analysis estimates reform could help tens of thousands of additional households take out building insurance and hundreds of thousands more obtain contents cover. That matters because underinsurance often becomes visible only after a disaster, when rebuilding costs, stock losses or business interruption expenses exceed what a policyholder expected.

This story is also an extension of the broader NSW Budget discussion around levy pressure. The latest modelling gives policymakers a clearer view of who may benefit most, but it does not remove the need for careful transition design. A property-based levy would change who pays, when they pay and how clearly the charge is understood. Public communication will be essential so households, landlords, strata residents and business owners can distinguish levy reform from ordinary premium movement.

For now, the practical takeaway is to keep reviewing sums insured, excesses and exclusions rather than waiting for reform to do all the work. If premiums are becoming difficult to manage, it may be worth taking time to compare cover options and, for more complex homes, strata risks or commercial exposures, speaking with insurance brokers who may be able to help explain trade-offs. A fairer levy would be welcome, but suitable cover still depends on understanding the risks that apply to your own property or business.