House Insurance Premiums Jumped Again

scottishdave on 23/11/2020 - 11:32

Just wondering if there is a reason for house insurance premiums jumping again? In my case by 25%.
I live in the inner city, nowhere near bushfire areas. The small print says it's due to the increased costs of rebuilding since last year.

I've checked with a number of other insurers and mine is still one of the cheapest but comparing quotes from last year there's been a big jump across the board.

I know that there are now only three major insurers left in Australia creating a triopoly leading to reduced competition but a 25% price hike can't really be explained away. Are we being price gouged while our minds are on Covid-19?

Home & Garden Home Insurance Insurance

Comments

  • holdenmg on 23/11/2020 - 11:46

    Yes

  • brendanm on 23/11/2020 - 11:49
    +2

    They know you have no choice.

  • holdenmg on 23/11/2020 - 11:52

    Maybe contact an Insurance Broker for a quote.

    They can assist you with a claim if you ever have one…

    • Noblejoker on 23/11/2020 - 12:13

      Insurance brokers do not shop around for simple products like a H&C
      Most of the time they will sell you their agencies in house branded product they organise as an agent
      If they are diligent they also have a system similar to iSelect which spits out quotes from 3 other companies
      ANd suspiciously their in-house brand always wins ;)
      So having them 'shop around' for you is a misnomer

      If you have particular/unusual aspects that require custom cover (and even if you don't) just find an insurer that you can talk to and get confirmation in writing of the cover
      You are buying a promise - don't buy a dodgy one

  • Hellfire on 23/11/2020 - 12:06
    +2

    Can you think of any large scale events in the last 12 months? The insurance companies need to recoup that cost across both the product line and their entire portfolio. Unfortunately the community doesn't like it when premiums reflect the true cost of insurance cover so it gets spread around quite a bit.

    • Seraphin7 on 23/11/2020 - 13:40

      100% correct. Some people simply wouldn't have/be provided with insurance if it was truly priced on individual risk. H&C is a classic area where the low risk and subsidising the high risk.

      • Noblejoker on 24/11/2020 - 09:35

        Agree completely - see my post below
        What might surprise some is how little local / Aussie events influence the prices
        US Bushfires and Hurricanes do as much or more to influence increases as local bushfires
        Sadly partly due to chronic under-insurance in Australia

  • Craze on 23/11/2020 - 12:07

    Who are you with out of curiosity OP? I'm pretty much on the same boat too- 25% increase in premium from last year which took me by surprise (I'm with AAMI). Checked out quotes with others and mine is still coming out cheaper so guess will still stick with AAMI for now.

    • sagrules on 23/11/2020 - 13:03

      Get a quote from AAMI directly as new customer, otherwise you are paying the lazy tax from the notice they sent you via post or email

      • Craze on 23/11/2020 - 15:59

        Yep knew this trick from few years ago. Surprisingly the home + Contents insurance is cheaper just to renew (A new quote is way more), but having a new quote on car works out cheaper.

        • sagrules on 23/11/2020 - 16:04

          Shame you missed out on CUA offer, they gave $250 gift card as incentive

    • scottishdave on 23/11/2020 - 14:25

      @Craze, I'm in Sydney.

  • Hellfire on 23/11/2020 - 12:11
    +1

    There is actually quite a bit of competition in the home insurance market:

    The big 4 groups IAG, Suncorp, QBE and Allianz. Plus the main challengers Youi, Auto & General, and Hollard. And the odd other business underwritten elsewhere.

    • scottishdave on 23/11/2020 - 14:33

      My existing policy is underwritten by IAG. I tried Allianz and they came just under my existing company's 2021 premium.
      @Hellfire, thanks. I might check the challengers for quotes. I haven't heard much about the challengers as far as service goes. Can anybody comment?

      • Hellfire on 23/11/2020 - 14:58

        They tend to be at the bottom end for service and coverage. Somewhere around AAMI or Bingle.

  • dogboy on 23/11/2020 - 12:12
    +2

    My house insurance has gone up ~20% every year. No claims, no increased risk and no explanation. Have shopped around and they are all like this. Crazy

  • Mechz on 23/11/2020 - 12:18

    Just got my renewal today, I'll have to check what I paid last year. Seems about normal I thought.

  • Noblejoker on 23/11/2020 - 12:20

    Insurance prices worldwide are increasing significantly as wholesale prices go up
    The 'wholesalers' are international reinsurance companies - the isnurance companies that insure the Insurance companies
    They are from all over but lots are German - are all making less money and putting up prices
    They have extremely detailed models around fire, weather, politics, etc. and all the signs aren't good

    Worldwide weather events particularly US storms and bushfires and to a lesser extent COVID are the cause more than anything local
    The other factor is record low interest rates which effects investment returns
    Insurance is like banks - they take your money (deposit - premium) and make a return on it before they have to give it back to you (interest - claim)
    If they can't make an investment return, then prices go up

  • ozbargainsam on 23/11/2020 - 16:30

    Oooh. I can't wait for the premium that awaits me on my insurance anniversary.

    I give Amy a friendly call every year for a bit of chit chat which usually works to stall the price rise. I'm still on the Complete Replacement thing (FWIW) and I think it's somewhat of a good deal. Quotes for a similar build value on other insurers usually involve premiums at least 50% higher.

    Last 5 year changes: 2%, 1%, 6%, 9% (thanks, Pocketbook)

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