We welcome the opportunity to provide comment to the 2009 Victorian Bushfires Royal Commission in response to its Discussion Paper on the fire services levy and insurance.
This submission is made jointly by the Brotherhood of St Laurence, Consumer Action Law Centre, Footscray Community Legal Centre and West Heidelberg Community Legal Service.
In this submission we concentrate on the alleged links between the levying of the Victorian fire services levy and insurance taxes on home building and contents insurance policies on the one hand, and non-insurance and under-insurance in Victoria on the other.
While we do not necessarily support the high level of taxes and charges now imposed on these insurance policies – there is some merit in the arguments both that they have grown too large and that they are levied on too narrow a base – we strongly disagree with claims that the impact and effect of these taxes and charges is a high rate of under-insurance or non-insurance of Victorian property.
Such claims are assumptions that ?sound like they would be right? but are, in fact, questionable on the evidence. By contrast, there is evidence that other, more significant factors are contributing to rates of under- and non-insurance in the Victorian community, and that these factors have been ignored or understated by the insurance industry.
Below we submit that the Commission should make any recommendations on the Victorian fire services levy and insurance taxes only after considering all the available research and information in this area, including research which indicates that levies and taxes may not contribute to rates of under- or non-insurance in the Victorian community to a significant degree and that other factors may be much more significant contributors to levels of under- or non-insurance.
We also recommend below that the Commission should ask the insurance industry to create no frills insurance products with different payment and policy cover options and to offer replacement policies and eliminate sum insured policies.
To read our submission, click here: Response to the 2009 Victorian Bushfires Royal Commission’s Fire Services Levy and Insurance Discussion Paper .