Victorian brokers are encountering angry clients as the state’s fire services levy (FSL) on insurance phases out.

While brokers welcome the end of the state’s FSL on July 1, they say the varying rates being charged by insurers over the next few months are antagonising clients and putting the industry in a negative light.

Midland Insurance Brokers MD Terry Lane says clients find it hard to accept his explanations on how the levy works and his assurances that insurers are only collecting it on behalf of the State Government.

“They think it’s just the insurers ripping them off,” he told insuranceNEWS.com.au.

Vero became the first major insurer to drop the levy on February 1 and Mr Lane says the variation in calculations and differing dates announced by insurers mean brokers are under pressure to shop around more and switch clients’ accounts, making it hard to support their holding underwriters.

Griffiths Goodall Insurance Brokers GM Ben Goodall says it’s extremely difficult to explain to most clients how their FSL charge is affected by the timing of their due expiry date and which insurer is involved.

“We see significant queries from these clients wanting to renew for a short term only, but not all insurers are allowing this,” he told insuranceNEWS.com.au.

“I am looking forward to not having to contend with this issue ever again from July 1.”

Mr Goodall says that after Vero dropped the FSL “it does come across to clients that the other insurers are charging unfairly”, and he is hoping all insurers will have either dropped the FSL or be charging a negligible levy by the end of March.

Anti-FSL campaigner and LMI Group MD Allan Manning has welcomed the wind down, saying some companies have built up pools so they can reduce or abandon their FSL charge earlier.

“I think it’s great,” he said.

Professor Manning had argued for a transition that allowed the FSL to be phased down while the property levy that replaces it would be gradually increased, but he says the current situation shows insurers are working to remove the levy.

“It’s the industry doing the best they can with a completely messed-up situation,” he said.

Allianz will abolish FSL charges on rural policies on March 10 for commercial clients who are currently paying 50% and householders paying a 20% levy.

Metro clients will no longer pay the FSL from May 1. They are currently paying 35% for commercial business and 16% on homes.

A company spokesman says the phase-out is going more smoothly than expected.

“When we originally found out that there wasn’t going to be the normal phase-down and simultaneous phase-up, we imagined a lot of potential issues around avoidance,” he told insuranceNEWS.com.au.

“People are comparing the amount of FSL they’re getting on renewals now with last year and generally speaking they’re lower. There’s hardly a cause for complaints.”