What should you do?
At this stage, there is no immediate action required, but please be aware of the changes.
We recommend clients regularly:
- Review the sums insured regularly.
- Ensure property and asset valuations remain current.
- Let us know about any changes to occupancy, your assets or how your business operates.
We’re Here to Help
Our team will continue to monitor government announcements, industry adaptation, and help clients understand how FENZ levy adjustments affect insurance policies.
Contact us anytime if you have any questions or concerns, or if you would like to discuss the upcoming FENZ levy changes or your insurance arrangements.
Key Levy Changes effective 1 July 2026:
* While the levy rate for many commercial and specialist risks is reducing, commercial property policies will now have the levy calculated against the replacement values rather than historical indemnity values, which are typically higher. In many cases, this may still result in an increased overall levy cost.
Impacts we anticipate:
Commercial Property
Commercial property programmes are expected to experience the most significant structural change. Historically, many levies were calculated using indemnity-style values.
From 1 July 2026, levies will generally be applied against declared sums insured or replacement values instead. While the levy rate itself is reducing, the value to which it applies will often be significantly higher.
This may result in increased levy costs for:
- Large property schedules
- Older buildings
- Industrial sites
- Mixed-use properties
- High-value commercial assets
Our initial testing and market analysis suggest that the “greater the gap” between Historical Indemnity Values (IV) and Current Replacement Values (RV), the larger the likely increase in the FENZ levy component.
The overall impact will vary depending on:
- Insurer approach
- Valuation methodology
- Policy structure
- Declared sums insured.
Marine, Industrial & Other Commercial Risks
Marine, infrastructure, plant, industrial, and other specialist commercial programmes may also experience changes under the revised levy framework. At this stage, insurer implementation across some specialist classes is still evolving.
Early indications suggest levy impacts are likely to vary depending on:
- Policy structure
- Asset type
- Sums insured
- Basis of cover
- Fire-related exposure within the programme
Clients with larger or more complex commercial programmes may therefore notice increased focus on declared values and levy allocation at future renewals.
Residential Insurance
Many homeowners may see a small reduction in the FENZ component applied to house and contents insurance policies. However, overall insurance premiums continue to be influenced by a range of broader market factors, including:
- Inflation and rebuilding costs
- Natural hazard events
- Claims trends
- Reinsurance pricing
As a result, overall premiums may still increase even where the levy component reduces slightly.
Motor Vehicle Insurance
One of the more noticeable changes is expected to be within motor vehicle insurance.
Clients may therefore notice changes to the levy component within future motor insurance renewals, with the overall impact varying depending on vehicle type, fleet composition, and insured values.
The confirmed move to a flat $25 levy per insured vehicle is likely to have a greater impact on:
- Multi-vehicle households
- Business fleets
- Trade and light commercial vehicle programmes
However, for some heavy vehicle and higher-value commercial fleets, the change to a flat fee structure may partially offset increases, as levies were previously calculated based on the insured value of the vehicle.
Need Assistance? Contact us today
Phone: 0800 237 747
Personal Lines:[email protected]
Commercial Risk: [email protected]
Claims: [email protected]
