Low-income households may be unable to protect themselves from disasters when the latest increase in home insurance levies takes effect, the Insurance Council is warning.
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The government has announced an increase in levies on all home and contents insurance policies to rebuild the National Disaster Fund, which has been used up paying for the Canterbury earthquakes of 2010 and 2011.
Insured homeowners will pay an extra 5 cents per $100 of insurance, for the first $100,000, from November.
Finance Minister Steven Joyce has said the government needed to start replenishing the fund so it was available for future natural disasters.
But Insurance Council chief executive Tim Grafton said householders already faced a 40 percent rise in levies to pay for Fire Service reforms.
Mr Grafton said that rise would be compounded by the new EQC levy, and GST would then be applied to both levies.
"Does New Zealand continue to go down the path of making it increasingly difficult for low-income people to protect themselves?" Mr Grafton said.
Mr Grafton said some people might not insure at all because of the price.
He also questioned the need for a National Disaster Fund, saying other potential risks were not pre-funded, such as a pandemic.