A price war has broken out in the final months of the Victorian fire services levy (FSL), with insurers dropping their rates by different amounts and Vero ditching the FSL on country policies altogether.

Insurers charge the levy to fund the state’s fire services and have historically all used the same rate, following the lead of price-setter QBE.

But in the months leading up to July 1, when the FSL is abandoned for a tax on all property owners, rates will vary widely.

From February 1 Vero will remove the FSL on commercial and personal insurance premiums for rural customers, who currently pay 70% on top of commercial premiums and 32% on home and contents.

The FSL on metropolitan commercial insurance will fall from 50% to 30% from February 1 and from March 1 it will fall to 15% from 22% for personal insurance.

Lumley will also cut its rates from February 1, for Victorian and NSW customers.

Victorian metropolitan customers will see their levy fall to 48% from 50% while the levy for households will drop 2 percentage points to 23%.

The Victorian country commercial levy will halve to 35% from 70% and rural households will pay 17.5% instead of 35%.

NSW commercial customers will pay 33.5% instead of 36% and residential consumers will pay 18.5%, down from 21%.

QBE last month announced it will cut its FSL from January 5, with country commercial business rates falling to 50% from 70% and rural residential to 20% from 30%.

Metropolitan commercial insureds will pay 45% instead of 50% and householders 15% instead of 20%.

The decreases come after large FSL rises in April to fund increased investment by the fire services.

These saw rural businesses levied 95% on top of their insurance premium, metro businesses 54%, country residential customers 46% and city customers 28%.