đ Why Home Insurance Prices Are Rising in Australia
In recent years, Australian homeowners have been hit hard by a surge in home insurance premiums. According to industry data, premiums rose by an average of 16% in 2023, with some areas seeing increases of over 40%. If you’ve opened your renewal notice recently and felt the sting, you’re definitely not alone.
So, whatâs behind the steep rise in costs? Letâs break it down.
đŞď¸ Climate Change Is Driving Up Riskâand Prices
One of the biggest culprits is climate change.
Extreme weather events like floods, bushfires, and storms are becoming more frequent and more destructive. From 2020 to 2022 alone, insurance companies paid out over $12 billion in claims related to natural disasters. In the 2023â24 financial year, claims surged again with more than 150,000 lodgedâa 75% jump compared to the previous year.
With disasters becoming the new normal, insurers are adjusting their pricing to reflect the increased risk, especially in flood- and bushfire-prone regions.
đ Rising Costs Across the Board
Itâs not just about disasters. A host of other cost pressures are also contributing to the rise in premiums:
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Reinsurance Costs: Insurance companies buy their own insurance (called reinsurance) to protect themselves. With more global disasters, reinsurance has become significantly more expensive.
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Construction Inflation: Building materials, labour, and transport have all gone up in price, making it more expensive to repair or rebuild homes.
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Supply Chain Delays: Shortages and delays in materials can drag out repair times and add costs, which insurers then pass on.
Put simply: everything costs more, and that flows through to your policy.
đ¸ Insurance Is Becoming Unaffordable for Many
With prices so high, more Australians are going without coverage altogether. A 2024 survey found that 1 in 4 people do not have home or contents insuranceâan alarming trend.
In some high-risk zones, premiums have reached $15,000 a year. Even in urban areas like Brisbane, the average premium is hovering around $11,881. For many families, thatâs simply not sustainable.
đşď¸ Where You Live Makes a Big Difference
There are big regional differences in pricing. In Adelaide, for example, average annual premiums in:
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Charles Sturt Council: $2,593
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Burnside Council: $1,515
Thatâs a difference of over $1,000 just based on location. Why? Insurers consider historical claims data, flood risk, crime rates, and even proximity to bushland when setting prices.
đď¸ Whatâs the Government Doing?
The federal government has stepped in with initiatives like the Cyclone Reinsurance Pool, which aims to reduce premiums in disaster-prone areas.
But industry experts say this isnât enough. Without stronger investment in:
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Better drainage and infrastructure
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Stricter building codes
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Smarter urban planning
âŚweâre likely to see premiums continue to rise year after year.
đ§ What Can You Do About It?
If your insurance premium has skyrocketed, donât just accept it. Here are a few ways to take action:
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Compare Policies
Insurers often offer lower rates to new customers than to loyal onesâso shop around. -
Raise Your Excess
Increasing your excess can lower your annual premium (but only if youâre confident you can afford the out-of-pocket cost in a claim). -
Improve Home Resilience
Some insurers offer discounts for flood barriers, ember-resistant vents, or other risk-reduction measures. -
Ask for a Discount
It sounds basic, but sometimes, calling and asking for a review can lead to savings. Everyday Insurance is one company that offers discounts when you use a Everyday Insurance coupon.
đ Final Thoughts
Home insurance isnât a luxuryâitâs a necessity. But as premiums soar, more Australians are being forced to weigh the risk of going without.
While some causes are out of our handsâlike climate events and global inflationâothers, like government policy and consumer awareness, can help ease the burden.
If you havenât reviewed your policy lately, nowâs the time to do it.