NSW insurance duty for a policy with multiple covers is calculated by apportioning the premium across the different insurance types and applying the correct duty treatment to each component, rather than applying one rate to the whole premium. Revenue NSW states that Type A general insurance attracts 9 per cent of its allocated premium, Type B attracts 5 per cent, and a life-insurance rider attracts separate duty of five per cent of the first year’s rider premium; figures checked 1 October 2026.
What has to be separated when one policy has multiple covers?
Revenue NSW says a policy may contain life insurance, different types of general insurance and exempt insurance. When different types are included, the premium must be apportioned and the amount relating to each insurance type separated before the correct duty treatment is applied.
Keep these components distinct:
- life insurance;
- each type of general insurance;
- any life-insurance rider;
- insurance that is exempt from duty.
A single total on the policy or premium statement should not obscure which amount relates to each component.
Which general-insurance rate applies to each separated component?
General insurance relates to property in NSW, or to a risk, contingency or event concerning an act or omission that may occur wholly or partly within NSW in the normal course. It includes car, home and contents insurance, but excludes life insurance, a life-insurance rider and insurance that is exempt from duty.
Revenue NSW classifies general insurance as follows:
| General-insurance type | What it includes | NSW duty treatment |
|---|---|---|
| Type A | Any general insurance other than Type B or Type C | 9 per cent of the Type A component of the apportioned premium |
| Type B | Motor vehicle, aviation, disability income, occupational indemnity, and hospital and ancillary health benefits insurance | 5 per cent of the Type B component of the apportioned premium |
| Type C | Crop and livestock insurance | 2.5 per cent for policies taken out on or before 31 December 2017; exempt for policies taken out on or after 1 January 2018 |
The Type C treatment depends on when the policy was taken out. The 2.5 per cent rate must not be applied to a policy taken out on or after 1 January 2018.
How is a life-insurance rider treated for duty?
Revenue NSW describes life insurance as insurance or assurance of a life or lives, or an event or contingency relating to the life of a person or group whose principal residence is in NSW when the policy is issued.
A life-insurance rider:
- is attached to a life-insurance policy;
- adds specified events and contingencies to those insured under the policy; and
- is subject to the policy’s terms and conditions.
Although a rider falls within the description of life insurance, Revenue NSW expressly says it is not a life-insurance policy. Its duty calculation is separate:
Rider duty = five per cent of the first year’s premium on that rider.
The five-per-cent rider duty is not charged on the combined premium for the whole policy. It also has a different premium base from Type B general insurance, where 5 per cent applies to the Type B component allocated during apportionment.
The official material relied on here does not state the duty rate for the life-insurance policy itself, apart from the separate rider rule. That component should be checked against the current regulator page and the policy’s product disclosure statement.
How do I check a mixed-policy calculation?
- Read the product disclosure statement and premium breakdown to identify each cover and the premium allocated to it.
- Classify each general-insurance component by its subject matter and NSW connection, then match it to Type A, Type B or Type C.
- Apply 9 per cent only to the Type A component and 5 per cent only to the Type B component.
- Apply the rider’s separate five-per-cent duty only to the first year’s rider premium.
- Identify exempt insurance separately and do not apply a Type A, Type B or Type C rate to it.
- Check the Type C policy date before applying the historical 2.5 per cent rate.
- If the premium has not been itemised, ask the insurer or broker handling the policy for a component breakdown. The cited Revenue NSW rules require apportionment but do not provide an allocation method in the material used here.
This is general information, not financial or legal advice. Check the current Revenue NSW regulator page and your policy’s product disclosure statement before relying on a classification, premium allocation or duty amount.
Sources
FAQ
Is the 9 per cent Type A rate applied to the whole combined premium?
No. Type A general insurance attracts 9 per cent of the Type A component after the premium has been apportioned. Type B, a life-insurance rider and exempt insurance require their respective treatment.
Why are Type B insurance and a life-insurance rider not treated the same?
Both use a five-per-cent rate, but the premium bases differ. Type B duty is 5 per cent of its allocated component, while rider duty is five per cent of the first year’s rider premium. The rider is not a life-insurance policy.
Can exempt insurance appear in the same policy as other covers?
Yes. Revenue NSW says a policy may contain exempt insurance alongside life insurance and different types of general insurance. The premium attributable to the exempt cover must remain separate and receive its exempt treatment.
Are crop and livestock policies still subject to 2.5 per cent duty?
The 2.5 per cent Type C rate applies to policies taken out on or before 31 December 2017. Policies taken out on or after 1 January 2018 are exempt.
What should I do if the premium statement does not separate the covers?
Ask the insurer or broker handling the policy for an itemised premium breakdown, then check each component against the PDS and Revenue NSW guidance. Do not apply a single classification or rate to the combined premium without support for doing so.
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