A large proportion of Australian homeowners expect their home insurance premiums to rise in the next year, citing concerns about the impact of severe weather events.
Recent survey data indicates that approximately 75% of respondents believe that storms, floods, and bushfires will drive up the cost of home insurance over the coming 12 months.
This sentiment is reflected in a poll conducted by nine.com.au, which surveyed 546 participants and found that more than half had already experienced an increase in their premiums during the past year.
Notably, many policyholders reported higher premiums even when their own properties were not directly affected by natural disasters.
One respondent said: “We had a major flood and the water came on our land but did not affect us, and we made no claim. But it’s still costing us more because of houses around us that did flood.”
This illustrates how insurers are adjusting risk assessments and pricing based on broader regional exposure, rather than individual claims histories.
The survey also revealed that a significant minority of homeowners are struggling to keep up with rising insurance costs.
Some respondents indicated that they have opted out of home insurance altogether due to affordability concerns, with one stating: “I can’t afford insurance and food."
Others expressed frustration over premium increases despite long periods without making a claim.
“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,” another participant said.
According to the same poll, 34% of respondents reported no change in their premiums, while a smaller group was unsure why their premiums had increased.
The issue of affordability is becoming more pronounced as the cost of living rises and insurance premiums continue to climb.
Data from the survey shows that the average annual home and contents insurance premium in Australia rose from $2,452 to $2,795 over the past year, representing an increase of 14%. In certain regions, premiums increased by as much as 17%, or up to $700.
These increases have been attributed to the growing frequency and severity of extreme weather events, particularly in states such as Queensland and New South Wales.
One Queensland homeowner reported a $1,200 increase in his premium at the last renewal, with the potential for further hikes due to updated flood risk mapping.
He noted that the new mapping did not reflect the actual flood risk for his property, which has not flooded in over a decade.
“The insurers go ‘well, it says here that it might flood,’ and the premiums won’t ever come down,” he said, as reported by 9News.
Separate research from Finder, conducted in November 2024, found that 69% of insured homeowners nationwide experienced premium increases over the previous year. This trend affected an estimated 6.4 million households.
The study also highlighted that 9% of respondents were unaware of changes to their premiums, suggesting that some policyholders may not be closely monitoring their insurance costs.
Peta Taylor, an insurance specialist at Finder, commented: “Insuring your home is becoming even more expensive as insurers pass on the cost of more frequent and severe weather events. Your house is often your biggest asset, and home insurance is a vital investment to protect yourself from financial loss due to damage or theft, but it still stings when the bill jumps.”
The Actuaries Institute, through analysis by Finity actuaries, reported that by March 2024, 1.6 million Australian households were experiencing affordability stress related to home insurance – a 30% increase from the previous year.
The report noted that, on average, households spend 9.6 weeks of their gross income on home insurance.
The proportion of policyholders spending more than one month’s gross annual income on insurance rose to 15% in March 2024, up from 12% the previous year.
