A portion of the $23.4 million recovered from 56 insurance companies that overcollected Victoria’s final fire services levy (FSL) will be used to help the state’s most disadvantaged consumers.

About $4.4 million will go to seven community and consumer groups for development of insurance information programs, advisory services and special research projects.

FSL Monitor Allan Fels says the projects will address “insurance market failure, and will reach many at a disadvantage in the insurance market”.

The money is drawn from levy revenue that was not practicable or efficient for insurers to refund to policyholders.

Many insurers overcharged the FSL in 2012/13 because they had to estimate the amount they were required to collect. A levy on council rates is now in place.

Among the projects to be funded are: an insurance law service delivering free phone advice and case work assistance; insurance training for financial counsellors; a helpline for indigenous consumers; insurance literacy projects for vulnerable community members; a scheme to reduce scam insurance targeted at taxi drivers and owners; and car insurance education for newly arrived migrants.

Funding will also aid research into the feasibility of non-profit insurance to tackle underinsurance among people on low incomes, and a feasibility study on the development of a home insurance price comparison tool.

Projects will be run by the Consumer Action Law Centre, Footscray Community Legal Service, the Financial Rights Legal Centre, Community Information & Support Victoria, the Brotherhood of St Laurence, Kildonan Uniting Care and Good Shepherd Microfinance.