Cutting home and contents costs: How switching could save you $819 a year

If your home and contents insurance bill seems bigger this year, you’re not alone. New research from Canstar reveals annual premiums have risen on average by 13%, equating to an increase of $286 for the average Aussie household in the past 12 months.

Canstar’s 2024 Home and Contents Insurance Awards research, which analysed a staggering 20,000 insurance quotes, found that households in South Australia have faced the most significant annual hike in costs. Prices have surged by just over 21%, pushing the average homeowner’s annual bill to an estimated $1,646.

That said, the northern region of Queensland continues to face the highest premiums, with average annual costs of $4,512. Despite this, premiums in north Queensland have fallen 7.5% on average over the past year. This decline could be attributed to the ongoing effects of the cyclone reinsurance pool.

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Of course, individual premium rises over the past 12 months will vary depending on someone’s circumstances and chosen insurer. Here’s a look at how average premiums have increased this year around the nation:

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Source: www.canstar.com.au – 27/08/2024. Premiums based on quotes obtained for Canstar’s 2023 & 2024 Home and Contents Insurance Awards and Star Ratings (September 2023 & 2024), for a range of addresses, property assumptions and building sum insured amounts. Premiums based on building sum insured amounts between $300,000 and $1,500,000 and a contents sum insured of $50,000. *North QLD is defined as the portion of Queensland north of, but not including, Rockhampton. Average Percent Changes since 2023 based on a sample of quotes across multiple providers and scenarios, that were undertaken to ensure consistency across the year.

Borrowers across the country have seen their mortgage repayments rise in recent years, in some cases by 50 per cent. With mortgage pain already biting, burgeoning insurance premiums could be a bridge too far for some Aussie families, who may be deciding to cancel their home and contents cover or to let it lapse.

Doing away with home and contents insurance can leave homeowners financially exposed to loss, damage or theft. Additionally, knowing you don’t have cover if your home or personal belongings are damaged or stolen can put some people in a constant state of ill-ease.

So what can concerned Aussies do to combat rising costs?

One way to cut home and contents insurance costs is to switch providers. In NSW alone, families could potentially save, on average, $644 on their annual premium, just by shopping around. In Queensland, it’s even more at an average of $1,072.

You could also consider reviewing your excess, although reducing this would leave you paying more if you need to make a claim.

While people should review their home and contents insurance at the time of their annual renewal at a minimum, if you’re conscious of every dollar you spend, it’s worth doing a health check on your premium when you next find a spare hour or two.

Most policies will let you cancel your existing insurance cover at any point throughout the year, however, some may charge a fee, so check your policy details before you decide to jump ship.

How much can you save by switching?

Policyholders can consider switching insurers in search of savings.
Canstar has evaluated insurance policies from 49 providers, analysing over 20,000 quotes covering eight regions, three cover types and up to two different sum insured amounts to identify potential savings available by switching to a top-rated insurer.

Based on this research, Canstar found on average it may be possible to unlock savings of $819 – or 32% – by switching to a Canstar 5-Star Rated home insurance policy compared to the rest of the market.

In North Queensland, the savings could be as much as 40%, the equivalent of knocking $1,903 off your bill or around 37% or $1,072 in the rest of the state. Homeowners in Western Australia and Tasmania could shave one-third (33%) off the average bill by switching.
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Source: www.canstar.com.au – 27/08/2024. Premiums based on quotes obtained for Canstar’s 2024 Home and Contents Insurance Awards and Star Ratings (September 2024), for a range of addresses, property assumptions and building sum insured amounts. Premiums based on building sum insured amounts between $300,000 and $1,500,000 and a contents sum insured of $50,000. *North QLD is defined as the portion of Queensland north of, but not including, Rockhampton.

A Canstar 5-Star Rated policy offers value beyond just a competitive price. The research considers policy features like temporary accommodation, valuables cover, new-for-old replacement, accidental damage, claims ease, and whether it’s customisable including choosing excess amounts or adding extras like portable items cover.

The Star Ratings not only highlight potential savings on home and contents insurance but also help Australians find the right policy by offering a shortlist of products that have been expertly assessed.

The highest-performing policies in the Star Ratings are honoured with Outstanding Value Awards at both national as well as state and territory levels.

Additionally, Canstar surveys hundreds of policyholders to gauge satisfaction with their provider’s claims process, forming the basis for the Most Satisfied Customers – Home Insurance Claims Award.

Which home insurance providers won awards this year?

This year’s award-winning home insurance providers based on Canstar’s extensive research, include:

• Home and Contents Insurance: AAMI, Allianz Australia, Budget Direct, Westpac (Inc. Bank of Melbourne, BankSA and St. George Bank)

• Home Insurance: AAMI, Allianz Australia, Budget Direct, Westpac (Inc. Bank of Melbourne, BankSA and St. George Bank), and YOUI

• Contents Insurance: AAMI, Suncorp Insurance, Westpac (Inc. Bank of Melbourne BankSA and St. George Bank)

• Most Satisfied Customers Home Insurance Claims: RACQ

If you’re contemplating making the switch, you can compare home and contents insurance with Canstar right now.

Cover image source: fizkes/Shutterstock.com