Events in 2020 have sadly highlighted the importance of home insurance for Australians, with bushfires destroying more than 3,000 houses around the country and heavy flooding in New South Wales putting a significant number of homes at risk.
Even if your home isn’t located in an area that’s considered at risk of natural disasters, you may be paying more attention than usual to your home insurance policy at the moment, and specifically the value for money it’s offering. The economic uncertainty caused by the coronavirus pandemic has meant many Australians are scrutinising their expenses more carefully, including the likes of home insurance premiums.
For our 2020 Home & Contents Star Ratings and Awards, Canstar Research assessed 129 products from 52 providers across three categories: home insurance, contents insurance and home and contents insurance.
Whether you’re planning on switching home insurers or considering taking out a policy for the first time, the results could help you make a more informed decision.
What difference could a 5-Star Rated home insurance policy make to your premiums?
Based on data from this year’s Star Ratings, Canstar Research found that combined home and contents insurance policyholders could save nearly $570 on average annual premiums by choosing a 5-Star rated policy, compared against the average of all rated policies on our database. Home-only (building) insurance customers could save over $420 on average, while those with a contents-only policy could save nearly $140 on average, Canstar Research found.
The tables below display the differences in premiums, both nationally and in each state and territory assessed as part of this year’s Star Ratings.
|Average 5-Star Rated policy premiums vs database average annual premiums for home insurance|
|Area||Database average||5-Star average||% difference|
|Source: www.canstar.com.au. Premiums based on the Canstar 2020 Home & Contents Insurance Star Ratings (Sep 2020). Premiums based on a home sum insured of $550,000. Queensland includes Rockhampton and all areas south. North Queensland is the portion of Queensland north of Rockhampton.|
|Average 5-Star Rated policy premiums vs database average premiums for contents insurance|
|Area||Database average||5-Star average||% difference|
|Source: www.canstar.com.au. Premiums based on the Canstar 2020 Home & Contents Insurance Star Ratings (Sep 2020). Premiums based on a contents sum insured of $50,000. Queensland includes Rockhampton and all areas south. North Queensland is the portion of Queensland north of Rockhampton.|
|Average 5-Star Rated policy premiums vs database average premiums for home and contents insurance|
|Area||Market average||5-Star average||% difference|
|Source: www.canstar.com.au. Premiums based on the Canstar 2020 Home & Contents Insurance Star Ratings (Sep 2020). Premiums based on a home sum insured of $550,000 and contents sum insured of $50,000. Queensland includes Rockhampton and all areas south. North Queensland is the portion of Queensland north of Rockhampton.|
This year’s national winners for Outstanding Value Home and Contents Insurance
Outstanding Value – Home Insurance
Budget Direct, CommInsure (including Bankwest), and the Westpac Group (including Bank of Melbourne, BankSA, St. George Bank and Westpac) are the winners of Canstar’s national Outstanding Value – Home Insurance Award for 2020.
Canstar Research noted that home insurance premiums increased by 5.7% on average compared to the previous year, but that the winning providers had kept ahead of the pack by either keeping prices stable or limiting any increases to their premiums.
This is the 14th year in a row CommInsure has won the Outstanding Value – Home Insurance Award, and the Westpac Group has now won the Award for three consecutive years. Budget Direct has won the Award for a second year in a row.
Outstanding Value – Contents Insurance
Similarly to the home insurance market, premiums for contents insurance increased year-on-year, by an average of 3% according to Canstar Research. However, this year’s Award winners for contents insurance had relatively similar premiums year-on-year, and scored higher on price than most of their competitors as a result.
ANZ and the Westpac Group have both now won the Outstanding Value – Contents Insurance Award for a fourth consecutive year, and Guild Insurance has won it for three years in a row.
Outstanding Value – Home & Contents Insurance
Canstar Research noted that this year’s outcome was largely driven by the premium increases seen across both the home insurance and contents insurance markets. The winning providers kept their premiums for both products relatively stable, and subsequently performed better than their peers.
This marks the 14th year in a row that CommInsure has won the Award, the fifth consecutive win for Budget Direct and the second year in a row for the Westpac Group.
This year’s State Winners for Outstanding Value Home and Contents Insurance
In addition to the national Awards, Canstar also has state-specific awards for Outstanding Value home, contents and home and contents insurance. The table below displays the winners of each category.
|North Qld – Home||CommInsure|
|North Qld – Contents||ANZ|
|North Qld – Home and Contents||CommInsure|
|NSW – Home||Budget Direct|
|NSW – Contents||ANZ|
|NSW – Home and Contents||Budget Direct|
|Qld – Home||Westpac Group|
|Qld – Contents||ANZ|
|Qld – Home and Contents||Budget Direct|
|SA – Home||Budget Direct|
|SA – Contents||ANZ|
|SA – Home and Contents||Budget Direct|
|Tas – Home||Suncorp Insurance|
|Tas – Contents||Westpac Group|
|Tas – Home and Contents||CommInsure|
|Vic – Home||CommInsure|
|Vic – Contents||ANZ|
|Vic – Home and Contents||CommInsure|
|WA – Home||Budget Direct|
|WA – Contents||ANZ|
|WA – Home and Contents||Budget Direct|
How were insurance policies assessed?
Canstar’s Home & Contents Insurance Star Ratings assess policies using a methodology that considers both price and features. There are 35 different consumer profiles that a product could be rated against, based on region, cover type and sum insured.
A policy’s Star Rating in each profile was determined by a combination of its price (50%) and feature (50%) scores. The price score is calculated based on a policy’s monthly and annual premiums.
The feature score is calculated by taking a number of features into account, which fall into six categories:
- Application – How can a consumer apply for the policy? The availability of specific discounts on sign-up and application conditions is also considered.
- Payment – What are the different ways in which a policyholder can pay their premium?
- Cover – Does the policy offer cover for (among other events) accidental damage, theft and flooding? Does it come with underinsurance protection, or cover for portable items?
- Service – Does the provider facilitate customer self-service? What support services does it offer to policyholders?
- Claim channels – Can the policyholder claim online? What are the different ways in which a customer can lodge a claim?
- Cancellation – How straightforward is it to cancel the policy?
This year, 43 policies received a 5-Star Rating in at least one of the consumer profiles. You can view the full list of 5-Star Rated policies in each profile via the results links below.
How were the Award winners determined?
Canstar Research gave an Award to providers found to offer outstanding value across the board, either nationwide or in a specific region. The winners were determined based on each provider’s cumulative score in the Home and Contents Insurance Star Ratings, with the insurer with the highest cumulative score in a specific region receiving an Outstanding Value Award for that region for either home, contents or home and contents insurance. The insurers with the highest scores across all regions received a national Outstanding Value Award for home, contents or home and contents insurance.
For more information on how the winners of our Home & Contents Insurance Star Ratings and Awards were calculated, you can read the methodology and view the full results for home insurance, contents insurance and home and contents insurance.