So, you insure your home, contents and car. You pay GST on that insurance.

If it's for a house or contents, then you pay another levy to cover you for what EQC will pay out in a natural disaster — up to $100,000 for the house and $20,000 for contents. Of course, the EQC levy has GST applied on that too.

Then, there's another tax — the Fire and Emergency levy.

This applies to house and contents as well as motor vehicles, and anything else you can think of that you could insure for material damage. It funds Fire and Emergency, which everyone benefits from even if they don't insure themselves.

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Anyone who's not insured is essentially free-riding the tax system. And, no surprise, the FEL has GST applied on it too.

We're one of the world's riskiest nations for natural disasters, so it's important we can afford insurance to protect ourselves.

Does it make sense that of $1000 of house and contents insurance, more than $400 is levies and taxes?

That's not all. What if you were being taxed twice for the same property?

Well, many of you will be under the new Fire and Emergency New Zealand (Fenz) Act because the FEL applies to every insurance policy that covers material damage.

Take the case of a young family who have scrimped to buy their new home and want to renovate or extend it.

They'll have bought house insurance, but if major structural changes are being done normal house insurance won't cover the building risks of a construction job.

That's where they would need to get contract works insurance for damage resulting from construction. In that case, they would pay the FEL on their house policy and on their contract works policy.

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Should the builder take out a construction defects policy to cover their liability for any damage to the property, that would be taxed too. So, effectively, the same property gets taxed three times.

Businesses get taxed twice too. Most will insure themselves against material damage arising from fire, earthquakes and building collapse, but those that take out separate cover for electrical or mechanical breakdown will pay tax on both policies.

A commercial property owner who takes out a normal material damage policy and, say, terrorism cover pays twice too.

Ride-on lawnmowers and golf carts will be taxed separately too.

Under the Fenz Act they are motor vehicles. In fact, any off-road motor vehicle will be taxed, so watch out farmers.

Insurers have treated ride-on lawnmowers as part of an overall contents policy because they present such a low risk compared with vehicles on the roads. Now, they'll have to ask questions, apply the tax and add to the cost of insurance in doing so.

Taking a trailer to the beach this summer with a boat or to carry the camping supplies?

Insurance cover for a trailer is a standard automatic policy extension for private motor vehicle policies. Insurers do not ask about whether a car owner has a trailer, they simply extend cover for a trailer if the customer has one.

Under the new Fenz Act, insurers must decide whether to change their systems and processes to ask customers another question (whether they have a trailer), and, if so, whether to levy it, or to remove the automatic cover, in which case the customer would only have cover for a trailer if they tell their insurer.

Motor vehicle dealers usually have the stock in their yards treated differently to fleet owners because of its very limited on-road use.

Insurers don't ask the details of all the vehicles in their yard, but in future they will have to with extra costs for changes to their IT systems to enable this.

Farmers, the fresh cut hay in the field escapes the tax until you bail it and shed it; then it's treated as stock.

These changes will happen unless there's a political will to stop them. Ideally, NZ should stop taxing only insured people to pay for fire services that are available to everyone.

- Tim Grafton is chief executive of the Insurance Council.