Home insurance premiums have increased by 51% across Australia over the past five years, according to data analytics firm Finity, indicating ongoing affordability and availability pressures in the household segment. Finity’s figures show the average home insurance premium rose from $1,940 in 2020 to $2,938 by October 2025. The increase has outpaced general inflation and is linked to catastrophe losses, construction cost inflation, and changes in insurers’ risk settings. Behind the national average, outcomes differ by geography and risk profile. Capital city premiums range from just above $2,000 to just over $4,000, with higher costs in suburbs and regions exposed to flood, cyclone, and bushfire. In some of these locations, households report that cover is becoming harder to secure or keep at a level they consider affordable.
Finity’s data shows Darwin recorded the highest average capital city home premium at $4,015 as of October 2025, followed by Sydney at $3,964 and Brisbane at $3,872. Canberra, Melbourne, Hobart, Perth, and Adelaide fall between about $2,042 and $2,622. At a finer scale, pricing concentrates in hazard‑prone zones. Average annual premiums in Brisbane’s west are about $8,396, compared with $5,410 in Darwin City and $5,350 across Sydney’s outer west and Blue Mountains region. These levels align with higher exposure to flood, bushfire, and severe storms, as well as claims experience and reinsurance costs.
Individual cases point to the impact on households. Paul and Denise Cameron, retired home owners in Dargan near the Blue Mountains, said their annual premium with NRMA has almost doubled since the Black Summer bushfires, even after a loyalty and multi‑policy discount. “The fire came right up to the front of the house [and] took out a few of the trees along the front. In one sense, I think we were lucky because the fire went sort of around us rather than straight through as it did at the other end of the street,” Paul Cameron said, as reported by ABC. Their premium has increased from $2,603 in 2019 to $5,071, after a 30% discount. When they approached other insurers, Cameron said they found few alternatives. “When I went to several companies, they wouldn’t insure us at all up here, so we only really had one company,” he said.
In Brisbane, a homeowner affected by the 2011 and 2022 floods was quoted $70,000 a year by Suncorp and $60,000 a year by AAMI, Suncorp’s subsidiary, when seeking cover last year, according to documents cited by the ABC. A Suncorp spokesperson said premiums continue to be shaped by weather‑related and economic factors. Insurance pricing was being affected by “the increasing frequency and severity of extreme weather events, rising construction costs, and persistent inflation, challenges that impact insurance affordability for all Australians. Suncorp employs sophisticated data modelling techniques and comprehensive risk assessment methodologies to determine premiums for individual properties,” the spokesperson said.
Finity principal Stephen Lau said recent premium growth reflects both higher hazard and higher rebuilding costs. “That premium reflects the underlying risk that the insurers face. So, if you live in a high‑risk flood area, or if you live in a high‑risk bushfire area, you’re likely to be charged a higher premium because it reflects that potential risk that home is facing,” Lau said, as reported by ABC. He noted that the cost of building materials and labour has increased. “If you looked at the materials and the building’s costs, and to some degree the labour costs required to help rebuild and repair homes, a lot of that work is very high [cost],” he said.
Lau said insurers were “dealing with about 300,000 claims or more” arising from the 2022 floods, which added pressure to builders, trades, and supply chains and has fed into assumptions used in pricing. Across the sector, the Insurance Council of Australia (ICA) estimates that extreme weather events since 2020 have generated $25.3 billion in insured losses, or an average of $4.8 billion per year, up 38% on the previous five‑year period. The ICA said insurers and governments are in discussions about how to address coverage gaps, including looking at overseas public‑private partnership models and at approaches to mitigation, adaptation, land‑use planning, and risk sharing.
Some homeowners are turning to resilience measures in an effort to manage their premiums. The Camerons worked with the Resilient Building Council (RBC), which runs a free program to assess natural hazard exposure and identify ways to reduce damage. The program rates homes on a one‑ to five‑star scale and sets out recommended changes for different perils. CEO and founder Kate Cotter said the RBC helps home owners take “specific actions” to reduce risk and then document those changes for their insurer. “That might mean for flood that we strengthen that structure so its walls and foundations don’t fail in a flood event … we might change out floor materials and wall materials so it doesn’t suffer so much damage,” Cotter said.
Cotter added: “For storms, taking action might look like protecting windows and secure roofing … for bushfires, there are lots of small actions you can take, like ember screens, cleaning up flammable materials around the home. Insurers can price that resilience into premiums now and not just offer insurance, but also be able to reduce premiums.” The Camerons said that, because their home had been designed with bushfire risk in mind and they obtained an RBC certificate, their annual premium fell by about $500. “I sent in a variety of photographs [to the RBC] … and they sent me a certificate which I then presented to the insurance company, and the insurance company eventually took it into account,” Paul Cameron said.
Premium increases are occurring alongside concerns about sums insured. Quantity surveyor firm MCG estimates that a substantial portion of Australia’s 11.4 million residential dwellings may now be underinsured after several years of construction cost inflation. Director and property insurance specialist Marty Sadlier said many home owners are still using outdated rebuild estimates. “Many homeowners simply don’t know what it would actually cost to rebuild their property today. Demolition, compliance with new building codes, professional fees – all of that adds up. Without a proper replacement cost assessment, people are effectively guessing, and guessing is risky when your home is your biggest asset,” Sadlier told 7NEWS.com.au.
Polling by the Australia Institute in 2025 suggested that about 1.4 million homes were either uninsured or under‑insured, pointing to a significant level of non‑insurance and underinsurance among owner‑occupiers. Separate pricing analysis indicates that upward pressure on premiums persisted through 2025. Canstar data shows the average home and contents premium rose by about 14% that year, from $2,452 to $2,795, with some areas seeing increases of up to 17%, or around $700. Research by Compare the Market found large differences between insurers’ quotes for similar risks, including a $2,853.78 gap for the same property in Sans Souci in Sydney and a $1,490.88 gap for one home in Brisbane’s bayside suburb of Wynnum.
Premium trends are intersecting with broader cost‑of‑living pressures. A YouGov survey commissioned by the Climate Council in January 2026 found that 54% of insured respondents were concerned that bushfires, floods, and severe storms could make home insurance unaffordable or unavailable in their area. Almost half (46% ) reported that their premiums had already increased due to extreme weather, and 22% said they may consider going without insurance if prices continue to rise alongside climate‑related risks.
A separate Nine.com.au poll in late 2025 found that about three in four respondents expected further increases in 2026, with more than half saying they had already experienced a rise over the previous year. Some respondents said they had cancelled cover altogether for affordability reasons, including one who commented: “I can’t afford insurance and food.” Another said: “I have never made a claim in 65 years, and my premium just keeps going up. I’m about to cancel all insurance and take a risk.” For insurers, intermediaries and policymakers, Finity’s 51% five‑year premium increase has become a reference point in discussions about risk‑based pricing, mitigation incentives, building standards, disclosure of sums insured, and potential public‑private mechanisms in higher‑risk regions.
