The question asked was:


Thanks for your previous response on the fire brigade matter. [ ]

I now have a query on GST for both replacement value of buildings and gross rentals.

My understanding is that GST is to be excluded from the declared values – can you confirm that this is in fact the case ? – my logic has always been that any
claim payments are GST exclusive so there is no reason to include GST in the declared values.

Can you please confirm that my understanding is correct ?

As always, appreciate your help.


Grant" [full name and email provided]

I answered as follows:

Hi Grant, you are correct for most polices. Some however, such as the standard [name withheld in blog] comes to mind (see page 47), do require that GST be included in the sum insured.

All your Cluster Group policies are definitely written such that the Sum Insured is set excluding GST. If you are in doubt, do a search on as GST inclusive or exclusive is one of the fields in the property section and the BI section follows the same rules.

I believe that all insurance policies taken out where the Insured is registered 100% for GST should be, by legislation, required to be GST exclusive on the Sums Insured, Limits and Sub-Limits of liability. Insurers never pay out the amount so why should they be permitted to charge a premium on it or penalise someone for under insurance when the amount will  never be paid? In the meantime, my suggestion is that you stay well clear of these policies as to me it is breach of the first principle of general insurance "Utmost Good Faith". Too many customers and brokers get caught with this issue and I am glad you are double-checking

I did write an article on the subject late last year. Please see

Hope this helps.