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Rising Insurance Premiums Challenge Australian Homeowners

Extreme Weather and Building Costs Drive Up Home Insurance Rates

Rising Insurance Premiums Challenge Australian Homeowners?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Australian homeowners are confronting substantial increases in home insurance premiums, driven by a combination of more frequent extreme weather events and escalating building costs.
Recent data indicates that the average annual premium for new home and contents policies has risen by 14%, equating to an additional $343 per year for policyholders.

Consumer advocacy group Choice has identified that certain insurers have implemented even steeper hikes. For instance, Kogan's average premiums have surged by 37.9%, RAC by 32.6%, and Honey by 30.7%. These increases are significantly above the national average and have raised concerns about the affordability of insurance for many Australians.

The primary factors contributing to these premium increases include:

  • Extreme Weather Events: The rising frequency and severity of natural disasters, such as floods, cyclones, and bushfires, have led to a higher volume of claims, prompting insurers to adjust premiums to cover these risks.
  • Increased Building Costs: The cost of building materials and labour has risen sharply, making property repairs and replacements more expensive. This escalation directly impacts the cost of claims, leading insurers to raise premiums accordingly.

In response to these challenges, homeowners are advised to explore strategies to mitigate the impact of rising premiums. These strategies include:

  • Shopping Around: Comparing policies from different insurers can help identify more competitive rates and coverage options.
  • Adjusting Coverage Levels: Assessing and modifying coverage to align with current needs can result in cost savings.
  • Increasing Excess: Opting for a higher excess can lower premium costs, though it requires a greater out-of-pocket expense in the event of a claim.

Consumer groups are also calling for greater transparency in how insurers calculate premiums and for regulatory measures to ensure that increases are justified and fair. As the industry grapples with these challenges, it is crucial for homeowners to stay informed and proactive in managing their insurance needs to ensure adequate protection without undue financial strain.

Published:Thursday, 22nd Jan 2026
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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Public Liability Insurance:
A very broad term for insurance covering liability exposures for individuals and business owners. It provides broad coverage, generally including all exposures for property damage and bodily injury.