What is the FENZ Levy?
The FENZ levy is a government-mandated charge that helps fund the services provided by Fire and Emergency New Zealand. It is collected through insurance policies on FENZ’s behalf and is separate from your insurance premium.
From 1 July 2026, changes to FENZ levy legislation will affect how the levy is calculated across a range of insurance policies.
The levy is set by the government and is not determined by insurers or insurance brokers.
How do these changes affect me and/or my business?
The information below outlines the key changes likely to affect both personal and business insurance policies. The actual levy payable will depend on the specific cover you hold. If you’re unsure how these changes apply to you, get in touch with you McDonald Everest Insurance Broker as we can provide guidance.
Please note: All levy amounts and rates shown exclude GST. GST will be added when the levy is charged through your insurance policy.
Domestic Insurance Changes from 1 July 2026
Residential Buildings
- Current maximum levy: $119.50 per year
- New maximum levy: $107.40 per year
Most homeowners will see a modest reduction in the levy applied to their home insurance.
Household Contents
- Current maximum levy: $23.90 per year
- New maximum levy: $21.48 per year
For many households, this will result in a small decrease in the levy charged on contents insurance.
Private Motor Vehicles
- Current levy: $9.53 per vehicle per year
- New levy: $25.00 per vehicle per year
This applies to all insured motor vehicles, including:
- Vehicles insured for third-party-only cover
- Trailers specifically noted on an insurance policy
Most households can expect an increase in levy costs for motor vehicles.
Commercial Insurance Changes from 1 July 2026
Commercial Motor Vehicles
The levy will move to a flat rate of $25.00 per insured vehicle per year, including:
- Vehicles insured for third-party-only cover
- Trailers specified on the policy
Businesses with predominantly light vehicles may see higher levy costs, while those operating heavy vehicle fleets may benefit from lower charges.
Current Rules
- Vehicles under 3.5 tonnes: Flat levy of $9.53 per vehicle.
- Vehicles over 3.5 tonnes: Levy charged at 11.95 cents per $100 of sum insured.
From 1 July 2026
A flat levy of $25.00 per vehicle will apply to all insured vehicles.
As a result:
- Light vehicle fleets are likely to experience levy increases.
- Heavy vehicle fleets may see substantial reductions in levy costs.
Commercial Buildings
The levy will be calculated using the sum insured shown on the policy schedule rather than the property’s indemnity or depreciated value.
The impact will vary depending on the insured values and policy structure, meaning levy costs may either increase or decrease.
Current Calculation
11.95 cents per $100 of indemnity value, with no levy cap.
From 1 July 2026
The levy will be calculated using the sum insured rather than the indemnity value of the property.
To support this change, the levy rate will reduce to 7.76 cents per $100 of sum insured, which is approximately 65% of the previous rate.
However, because the basis of calculation is changing, some policyholders may still experience an increase in levy costs.
Mixed-Use Buildings
Properties containing both residential and commercial occupancies require special consideration.
The levy treatment is based on the predominant use of the building, determined by the majority of occupied floor area.
Where 50% or More of the Building Is Residential
The residential levy rate of 10.74 cents per $100 of sum insured applies, subject to a maximum levy of $107.40 per dwelling.
Where Less Than 50% of the Building Is Residential
The commercial levy rate of 7.76 cents per $100 of sum insured applies, with no maximum cap.
Property owners may now provide a registered valuation that separately identifies residential and commercial values, enabling a split levy calculation where appropriate.
Additional Policies where FENZ has changed
Forest and Livestock, Contract Works, and Aircraft are also affected by the change in the Levy. Please see below how these changes apply.
Forests and Livestock
A levy of 1.94 cents per $100 of sum insured will apply with no maximum cap.
The levy charged will depend on insured values and policy design.
Contract Works
Current Calculation
The levy is charged at 11.95 cents per $100 of sum insured, after any applicable exemptions or deductions have been applied.
From 1 July 2026
The levy rate will reduce to 3.88 cents per $100 of sum insured and will generally be based on the completed value of the works.
The levy payable will depend on:
- Policy structure
- Contract duration
- Applicable exemptions
- Project stage
Domestic Contract Works – Where a home under construction is insured under a contract works policy, the contract works levy rules apply rather than the standard residential building levy rules, regardless of the intended future use of the property.
Aircraft
A levy of 7.76 cents per $100 of sum insured will apply, with a maximum levy of $77.60 per aircraft operating on domestic routes.
Still have questions?
What is "sum insured"?
The sum insured is the maximum amount payable under an insurance policy in the event of a total loss, before allowing for any policy extensions, endorsements or sub-limits.
What do I need to do now?
Nothing at this stage. The new rules only apply to policies that commence or renew on or after 1 July 2026. We at McDonald Everest Insurance Brokers will discuss any relevant impacts with you at renewal.
Will these changes affect my insurance costs?
The FENZ levy forms part of the total amount collected through your insurance programme. Depending on the policies you hold, the levy component of your overall insurance cost may increase or decrease.
Why might my commercial property levy increase even though the levy rate has decreased?
Previously, the levy was calculated using a property’s indemnity value (or depreciated replacement value). From 1 July 2026, it will be calculated using the property’s sum insured.
Although the levy rate has reduced to 7.76 cents per $100 of sum insured, the change in calculation method may result in some policyholders paying a higher levy.
What happens if I make changes to my policy before renewal?
If a policy is reissued, replaced or recommences on or after 1 July 2026, the new levy rules may apply from that date.
If the levy increases my insurance costs, what support is available?
We can discuss options to help manage insurance affordability, including reviewing your insurance programme and discussing payment options that may be available.
I have more questions, what do I do?
If you have any questions about how these FENZ levy changes may affect you, your household or your business, please contact us at McDonald Everest Insurance Brokers. We are here to help you understand the changes and discuss any implications for your insurance programme.
