How to save on home insurance

Home and contents insurance is a necessary and sensible cost for many Australians, and there are ways you could save on your premiums. Canstar explores some options to consider.

The cost of insuring your home and its contents can vary massively based on factors including where in the country you live, the materials used to build your home and the value of its contents. But there are many other factors providers take into account when pricing their policies, some of which you may be able to use to your advantage to pay less.

Here are 10 tips that may help you save on home and contents insurance.

1. Increase your excess

A home insurance excess is the amount you agree to pay your insurance provider if you have a claim approved. Many providers give customers the option to choose how much of an excess they will pay, and according to Moneysmart, “you may be able to save on your premium by increasing your excess”. It’s important to note that if you do this you’ll face higher costs if you end up needing to make a claim.

2. Buy online

Many home insurance providers offer a discount to customers who buy a policy online rather than over the phone or in person. If you’re comfortable buying online, providers offering a discount can typically snip around 10-15% off the cost of your policy.

3. Take advantage of a multi-policy discount

With some providers, if you buy more than one policy (such as home and contents cover, plus car insurance), you could get a discount on one or all of the policies, compared to the cost of buying the policies separately. But this requires a degree of caution, as you need to make sure that buying the policies from the same provider makes sense overall. For example, it may still work out cheaper to pay full price for the policies with separate providers. It’s also important that each of the policies is suitable for your situation and you aren’t sacrificing on the level of protection you’re getting to receive what might be a relatively small discount.

4. Loyalty and other discounts

Some providers also offer loyalty discounts to their long-time customers. Discounts for Seniors Card holders are another common offer that some providers may have. These discounts typically can be stacked, but keep in mind that some providers either have a premium minimum limit for the discount to be applicable, or limit the maximum discount percentage that a policy can have.

5. Increase home security

When you’re applying for a home and contents insurance policy, some providers ask about the security features at your home, such as burglar alarms, security screens on windows and the types of locks on the doors. According to Allianz, taking steps to boost security could mean “reduced premiums, as your insurer will see your home as being less at risk of a break in, and you at less risk of making a claim.”

Not all insurance providers offer discounts based on home security features, so consider checking what you’re likely to save before going ahead with potentially expensive additions to your home’s security.

6. Shop around for a better deal

Another major factor that will determine the cost of your home and contents insurance policy is which provider you choose. If you’re applying for cover, consider getting quotes from a few providers so you can compare costs. And if it’s time to renew your policy, it could be a good opportunity to look at what other options are out there that could represent better value. Canstar’s Home and Contents Insurance Star Ratings are designed to help consumers shop around based on an expert assessment of a wide range of policies. This could be a good place to start.

Be sure to pay close attention to the inclusions, exclusion, limits, as well as any other terms and conditions of the new policy before you switch. You can ask the provider for a copy of the Target Market Determination (TMD) and Product Disclosure Statement (PDS) for a policy to find out the details.

7. Pay your premiums annually

If it suits your budget, you could save money with some providers by paying your annual home and contents insurance bill in one go, rather than in monthly instalments. Be sure to check the policy’s details, including if what’s covered matches your needs, as well as the provider’s policy on cancellation and refunds in case you need to cancel the policy early.

8. Avoid extras you don’t need

According to Moneysmart, “when buying insurance, focus on what you need”. For example, when you’re buying a policy, chances are you’ll be offered some ‘bells and whistles’ on top of the standard level of cover, in return for paying a higher premium. Common examples include cover for your contents if they are out of the home or certain kinds of flood cover. Think carefully about whether these add-ons are going to be worth the extra cost.

9. Review the value of your contents

If you have contents insurance, reviewing the sum of your contents could help you save on your premium costs. It’s an easy step to miss or brush past but worth considering since properly valuing your contents could be an easy way to save your money, particularly in the long run. While the value of contents such as jewellery generally do not change over time, it’s not the same for furniture or electronics such as fridges, laptops, or TVs, which often experience wear and tear and depreciate over time. With that in mind, it’s worthwhile to read your policy’s Product Disclosure Statement (PDS) to understand whether you will be covered for your contents’ market value or replacement cost.

If you have an overestimated value of your contents, you’ll end up paying a higher premium than necessary. You can avoid this by re-evaluating your contents periodically (ideally once a year, before you renew or sign onto a new policy).

10. Review your policy regularly

If you have found a policy that ticks the boxes for the level of cover you need and is also friendly on your wallet, it’s still important to review it regularly to make sure it matches your circumstances. If there have been changes, you should inform your provider. Doing this could mean the cost of your premiums change too. For example, if you have moved home, upgraded your home’s security, or recalculated the value of your home’s contents, the premium could be impacted. But not all changes will result in a premium decrease.

If your provider informs you that your premiums are increasing, it may be time to compare your options.

Compare Home & Contents Insurance

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