Insurance brokers are furious at the latest hike in Victoria's fire services levy (FSL) which has risen to 84% from 68% for commercial policies in country areas.

A series of increases have seen the levy escalate from 58% late last year.

National Insurance Brokers Association (NIBA) CEO Noel Pettersen says it's impossible to understand how the Victorian Government can justify the rises, given the problems of non-insurance and underinsurance that emerged after the bushfires in February.

By NIBA's reckoning, $100 in premium now costs $223 when the levy, GST and stamp duty are added.

In a statement, Insurance Council of Australia General Manager Communications, Paul Giles, says the current fire funding system in Victoria is government policy.

"Under the fire funding system, general insurers are required to contribute to the budgets of the Metropolitan Fire Brigades and Country Fire Authority," he said.

"The contribution to each from general insurers is 75% to 77.5% respectively.

"According to the Victorian fire authorities, this will amount to $500 million in 2009/10. This amount set by the Victorian fire authorities is an increase of over 30% from the previous financial year.

"Insurers then recover this contribution from general insurance policyholders."

In July, Victorian Premier John Brumby told Parliament he stood by the levy but added the Government wanted to lift aggregate levels of insurance cover across the community following the bushfires, and that Treasurer John Lenders is looking into this.

Also see ANALYSIS.