QUESTION
I have a client whose existing boat policy (insured elsewhere) is a GST-exclusive policy; therefore, the Levy has been calculated off the GST-exclusive price. Now I am obtaining some quotes, and these policies are GST-inclusive polices, meaning the FENZ levy is being calculated at a higher rate due to the GST portion being included.
Should the GST portion be included or excluded when calculating the FENZ Levy?
Example - current policy sum insured is $31,304 + GST, so the levy is $37.41 + $9.53 for trailer.
But quotes are $36,000 GST inc, so the levy is being calculated at $43.02 + $9.53 for the trailer.
EXPERT ANSWER: Stephanie Beswick, Fire & Emergency NZ
The sum insured should be the amount that would be payable to the insured in a total loss situation. Our Act does not specify if that is the GST inclusive or exclusive value; it just states it’s the sum insured or indemnity value of the policy.
If the policy specifies a value excluding GST, the policy or policy wording would state that the exclusive or inclusive value is the basis of a settlement; therefore, that is the value used for the levy calculation.
