NSW Insurance Taxes Put Premium Affordability Back in Focus

The most closely watched figure is the Emergency Services Levy, which helps fund fire and emergency services through charges collected from insurers, councils and some policyholders. For 2026-27, levy contributions are forecast at about $1.512 billion, with a higher figure projected for the following year. Insurance duty is also set to remain a major revenue source, adding another layer of cost to many general insurance policies.

For households, the practical issue is simple: taxes and levies can make already expensive home and contents cover harder to maintain. For small businesses, the pressure can be sharper because commercial property insurance is often essential for leases, loan arrangements and business continuity planning. When premiums rise, some policyholders respond by increasing excesses, reducing sums insured or dropping optional sections of cover. Those choices may lower the bill today, but they can leave a much larger gap after a storm, fire, theft or liability event.

The Insurance Council of Australia has renewed its push for reform, arguing that NSW remains the only mainland state that funds emergency services in this way through insurance customers. Its position is that emergency services benefit the whole community, so the cost should be spread more broadly rather than concentrated on people who take out insurance.

For consumers, the debate is not just political. It is a reminder to read renewal notices carefully and understand what is driving the final price. A premium can include the insurer’s risk price, reinsurance costs, administration charges, GST, duty and levies. Looking only at the headline increase may miss whether the policy still fits your property, location, risk profile and budget.

If your renewal has jumped, avoid cancelling cover without checking the consequences. Instead, review the sum insured, excess, listed events, exclusions, optional benefits and claims service record. NSW homeowners and business owners may also benefit from asking whether mitigation measures, updated valuations or different policy structures could improve affordability without creating dangerous underinsurance.

Where policies are complex, working with a broker can help identify whether a higher premium reflects market conditions, changed risk assumptions or a policy that no longer suits your needs. It is also a good time to compare cover rather than automatically accepting a renewal, especially if your circumstances have changed.

Until levy reform is resolved, NSW policyholders should expect insurance affordability to remain a live issue. The key is to stay insured where possible, question unexplained increases, and make cover decisions based on risk rather than price alone.