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Consumer Action Law Centre has welcomed the Victorian Government’s plan to establish a Fire Services Monitor to protect consumer interests as changes are made to the way the fire services levy is administered. The levy, which has traditionally been collected through insurance premiums, will soon be collected through land rates, meaning insurance premiums should drop – and drop significantly if industry claims about the impact of the levy are to be believed. But Consumer Action says the new monitoring body is necessary to ensure insurers reduce premiums by the full amount.

‘The fire services levy has traditionally been built into the cost of Victorians’ insurance, but as this will no longer be the case, Victorians should expect to see a drop in their insurance premiums. We’re pleased the Government has established an independent monitor as without independent oversight, there would be little motivation for insurers to pass on the full savings,’ said Gerard Brody, Director of Policy and Campaigns at Consumer Action.

‘There was an obvious risk that consumers would be paying the levy though their land rates and see minimal changes to their insurance costs. But with Professor Allan Fels in charge of a new monitoring body which has the power to take insurers to court if they fail pass on savings, we expect to see the insurance industry acting appropriately.

‘It will also be interesting to see whether removal of the levy will have an impact on levels of underinsurance.  We very much doubt it – despite industry claims, removal of the levy in other jurisdictions has had little impact on rates of under-insurance.  Consumer focussed solutions are necessary to attack this problem – including insurers increasing the availability of suitable products for renters and low income consumers, and  making available payment options such as CentrePay, which enable consumers to smooth the impact of big bills,’ said Mr Brody.

The new monitoring body is the latest fire services levy announcement welcomed by Consumer Action which has previously supported moves to stop the Metropolitan Fire Brigade suing uninsured Victorians for the cost of a call out.

‘Previously if the MFB responded to a call out at a rental property and neither the property owner or resident had insurance, the MFB could sue either or both parties for the cost. But it’s clearly unfair for a tenant to be sued for faulty wiring that in no way could be their fault – the old system was arbitrary and had the potential to cost innocent parties thousands of dollars.

‘One of the advantages of the levy now being charged on property rates is that all properties will be covered for the cost of a call out and innocent parties won’t be left holding the bill,’ said Mr Brody.