More Victorian businesses elect not to insure due to absurd FSL rates
On Friday I visited a broker in Ballarat to provide training to their staff on PolicyComparison, BIcalculator and RiskCoach and heard several cases of where Insured’s are, as I had early in the week, elected not to increase their sums insured or worse still elected not to insure at all. This is extremely worrying for not having property insurance is one thing but where a client over reacts and says they want nothing to do with insurance and take away business interruption, theft cover and most important of all liabilty insurance it is frightening.
I had another example on Sunday in the town of Daylesford.
As most readers will know, in rural Victoria the Fire Service Levy (“FSL”) has reached 95% of the fire/property rate. You then have the triple tax of GST and State Government Stamp Duty being applied to this to make the cost of insurance 143% more than the base premium. It was when FSL reached this level in Queensland back in the mid 1980’s that the then Premier Joh Bjelke-Petersen removed FSL in that state.
I have been concerned for some time at the high level of the tax in rural Victoria was too high but treated it as a bitter pill to swallow but at least in 12 months it would be gone and the cost of home & contents insurance and business insurance would be lower. But after the last few days, I question the cost of the bitter pill.
Business failure rates are at a terribly high level and the Victorian Government forcing so many businesses to under or not insure will all but guarantee business failure in the event of a sizeable property or business interruption loss.