FENZ Levy Update: What It Means for your business

Reforms to the Fire and Emergency New Zealand (FENZ) levy are progressing, with implications for the road transport sector and commercial property sector. The FENZ levy structure, currently applied through insurance policies is due to change on the 1^st of July 2026.

Impact on Your Business

Changes are expected to better align how levies are applied across asset types, including commercial vehicles. For transport and logistics operators, the levy change will have a noticeable impact across a fleet. As these costs are typically incorporated into insurance pricing, these levy changes will affect all insurance renewals that take place from the 1^st of July.

The Levy Change for Vehicles  

Historically, all heavy trucks, trailers and portable plant have been charged a levy based on the total sum insured. As of July 1^st, each vehicle will now be charged a flat rate of $25. Portable plant and machinery levy charges will still be charged at a rate based on the sum insured, however the rate will decrease.

A transport operator with 5 heavy units valued at $100,000 each buying insurance prior to July 1^st 2026, would have paid a total FENZ levy of $597.50. After July 1^st, the FENZ levy for the same operator would be $125. The light vehicle FENZ levy charge before July 1^st was $9.53, with effect from July 1^st the levy charge is $25. 

The Levy Change for Commercial Property

The levy for commercial property will be based on the full sum insured (replacement value) rather than the current charge on the lower indemnity value. Although the rate will decrease, some businesses may see levy increases. The biggest impact will be on companies with high building, plant, or equipment values.

A commercial property owner with replacement sum insured listed at $5,000,000 currently pays the FENZ levy charged on the indemnity (depreciated) value ($2,500,000). The FENZ levy is $2,500,000 x .1195% = $2,987.50. As of July 1^st, the FENZ levy is charged on the full replacement sum insured at the decreased rate. $5,000,000 x .0776 = $3,880.00.  

Next Steps

We recommend operators stay informed and review their insurance programmes as the changes take place. The team at O’Connor Warren are here to help you understand and manage any changes so please contact us if you have any concerns or questions.