Home insurance prices are going up for millions of Australians, with one insurance expert reminding consumers that being loyal won’t do you any favours.
A new survey from Finder found 63 per cent of insured Australians say their premiums have been hiked in the past 12 months.
About 60 per cent of Australians have a home and contents insurance policy to protect their property.
Right now, Australians are doing it tough through the cost-of-living crisis and the best thing people can do is shop around for the best deal.
Finder insurance expert James Martin says there is little to no cost benefit for staying loyal to a home insurer.
“The best deals are typically offered to new customers when they sign up online,’’ he said.
“Insurers often offer discounts of up to 30 per cent for new customers, so it absolutely pays to shop around each year.’’
Despite shopping around being the best thing people can do, only 11 per cent of people with a home insurance policy have switched brands in the past six months.
Finder managing editor Sarah Megginson noticed her home insurance premium went up by 33 per cent, from $3300 to $4400.
“I shopped around. It took me about an hour and I got a policy with the same coverage for $2950,” she said.
How to shop around for home insurance
Speaking to The New Daily, Dr Rotimi Boluwatife Abidoye, a lecturer in property and development at UNSW, said it is extremely important for everyone to have home and contents insurance, even if it is getting expensive.
“I think it’s still wise to have that insurance for your property, because you don’t know when things will happen,” he said.
Dr Abidoye said the reasons why the cost is going up, and Australians are starting to take notice, is pretty obvious.
The first reason is inflation.
“Inflation, which we experience in our day-to-day shopping, in energy bills, it’s trickling down to property as well,” he said.
However, recent events are also part of the problem.
In 2022, big parts of the country were inundated by floods and many homes were completely ruined.
In turn, insurance companies need to accrue more money to rebuild people’s homes, he said.
Even if you weren’t hit by the floods in 2022, you might not get so lucky the next time there is a deluge.
“Due to global warming, anything can happen at any time,” Dr Abidoye said.
Dr Abidoye actually noticed the cost of his insurance was going up in November, so he shopped around for a better price.
When doing so, he encourages people to look carefully at what you will be getting.
If something is cheaper, it doesn’t mean everything you have is going to be covered, he said. So doing your homework is so important.
He also found merging all his insurance under one company worked out to be a better deal.
“When you bring those policies together under one company, sometimes they give you some discount,” he said.
Tips on how to save on your home insurance
It can be overwhelming trying to cut costs during trying times but you should shop around instead of just renewing your plan.
Often home insurers will offer discounts to get you on board and this can save you quite a bit of money.
If you want a save money, it’s worth investing in home security, as insurers love safe homes. Think internal alarms and sirens on the outside and strobe lights.
Finder also recommends increasing your excess – the specified amount you have to pay every time you make a claim.
“Most will let you increase your excess in return for cheaper premiums. There’s a downside though – making a smaller-value claim won’t be worth it,” Finder warns.
