How to switch home insurance providers

Deputy Editor · 19 March 2021
Thinking of switching your home insurance? Canstar takes a look at the steps involved and what you may want to consider if you’re looking to save money while getting an appropriate level of cover for your home.

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Can you switch home insurance at any time?

You can generally switch home insurers at any time, but if you want to avoid cancellation fees, it could be a good idea to time the switch so your new policy begins when your current one expires. The expiry date of your current policy should be listed on the documents provided by your insurer when you took out the policy or renewed it last. Insurers also typically notify you in advance of your current policy expiring. Bear in mind that if you haven’t cancelled your current policy by the date specified by your insurer, it may be automatically renewed for another term – usually a year.

Of course, if you’re concerned that your current insurance policy is not suitable for your needs (such as if you think you may be underinsured and would be left short if you needed to make a claim), it may be a good idea to consider a new policy, even if it means having to cancel your current policy before it expires.

For example, you may choose to switch your home insurance outside the renewal cycle if you move house and your insurance needs change as a result. Alternatively, you may simply be able to transfer your current policy to the new property if you prefer. Check with your insurer whether any fees apply for doing this, and bear in mind that your premiums and other aspects of your policy may change depending on where you move to.

Switching home insurance checklist

If you plan to switch your home insurance, the steps involved can include reviewing your current policy, comparing new insurers and applying for a new policy.

Step 1: Review your current insurance cover

A smart first step could be to take a look at what your current home insurance policy covers you for, what’s excluded, how much the excess (what you need to pay if you make a claim) is for different claim types and whether the policy is based on a sum insured amount or total replacement cost. In other words, if you need to make a claim, will the insurer cover the entire cost of replacing your home (minus the excess) or pay out only the amount specified in the policy?

Step 2: Compare other home insurance policies

Next, take a look at what other insurers have to offer. When comparing options, it’s important to bear in mind what your current policy offers, so you can understand whether a new policy will provide an appropriate level of cover at better value. Some of the factors you may want to keep in mind when considering a policy include:

  • The premium amount you’ll be paying
  • Which risks are covered and which ones are excluded (for example, some policies do not cover certain kinds of flooding). If you live in an area prone to natural disasters, this could be a particularly important consideration.
  • The level of cover on offer for different kinds of claims
  • The other features included, such as cover for the cost of temporary accommodation if your home is damaged
  • The level of customer service you’ll receive (e.g. 24/7 claims)
  • Whether you can pay your premiums monthly (instead of annually) at no extra cost
  • Whether the insurer offers any discounts (e.g. a multi-policy discount, cheaper premiums if you purchase the policy online or pay annually).

To help you compare options, Canstar rates a range of home insurance providers across Australia, based on factors including the level of cover and premiums charged. The most recent Ratings, in September 2020, found the premiums of 5-Star Rated home and contents insurance policies were on average more than 35% cheaper than the policies on our database as a whole. This is a national figure, based on a home sum insured amount of $550,000 and contents sum insured amount of $50,000.

Use our comparison tables to see how the insurers on our database compare based on the criteria relevant to you and your home.

Step 3: Talk to your current insurer

If you think you could get a better deal elsewhere, it may be worth talking to your current insurer to see if it is prepared to offer you a discount or better terms to keep you as a customer. Doing this could help you get the outcome you’re looking for, without needing to switch.

Step 4: Apply for new cover

If you decide to switch, you’ll need to apply for cover by providing details to your new insurer. This information can include your name, age and details of any other people who live with you. You’ll also need to answer questions about your home, including where it’s located, when it was built and from what materials. If you’re applying for a combined home and contents policy, you’ll be asked to indicate the value of your home’s contents that you wish to insure, and whether there are any individual items of value you wish to have specifically listed on the policy.

When calculating your premiums, your insurer may ask for further information to assess the level of risk involved in covering you. This could include details about your claims history with previous insurers, whether there are any security features on your home (e.g. an alarm system) and whether there are overhanging trees close to your home.

It could help to also disclose information relating to your home and work habits. For example, if you work from home or are usually at home during the day for another reason, you may be able to negotiate a discount on your policy.

When applying for cover, make sure to set the cover start date carefully, so your home is not left uninsured at any time during the transition.

Step 5: Start your new policy

Once your new policy has started, it can be helpful to have an electronic copy of the policy details, in case your paper copies become damaged or lost. Also consider setting a reminder to review your policy before it auto-renews, so that you can compare your options and potentially avoid paying a fee. If your circumstances change after your policy starts, be sure to let your insurer know.

Do you get money back if you cancel home insurance?

If you inform your insurer you wish to cancel your policy, it may refund the unused portion of the premiums you have already paid, depending on the terms and conditions of the policy. As a hypothetical example, if you have paid for 12 months worth of cover up front and decide to cancel your policy after six months, your insurer may refund the cost of the remaining six months’ cover. Bear in mind there may be a cancellation fee and you would generally not be refunded for any government fees included in your premium.

If you pay your premiums monthly, depending on the insurer, you may not be refunded for any unused premiums (e.g. if you cancel midway through the month). How cancellations, and any fees that may apply, work for monthly premiums can vary by insurer, so consider checking your provider’s policies.

If your insurer offers a ‘cooling-off period’ and you decide to cancel within this timeframe (typically the first 21-30 days after a policy renewal), you should generally get a full refund with no cancellation fees.

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