Shop around for a good insurance deal
Nationally, the average cost of home insurance has grown at double-digit rates for several years.
The two big insurers, IAG and Suncorp, expect to raise premiums by a smaller amount this year, but after the recent rises many households will still feel the hit.
A major reason for the rises of recent years, insurers say, is the cost of covering a wave of catastrophes such as floods, cyclones and fires.
People who face the greatest risk of disaster have often endured the biggest price increases, but the rises are also being spread across all policyholders.
This week's graphic, based on analysis by Canstar, shows people in Tasmania in particular have faced the sharpest increase in their costs, but the trend occurred across most of the country. Victoria is the odd one out, but this is the result of a fire levy being removed, rather than a reduction in what the companies are charging.
What can customers do to make sure they're not getting dudded on insurance?
It may be a widely repeated cliche of personal financial advice, but shopping around is a vital first step. It's especially important in an industry like home insurance, where two companies, IAG and Suncorp, control about half the market.
Despite this, research suggests Australians are generally unlikely to weigh up the different deals on offer when they're buying insurance.
Figures from Nomura and Roy Morgan, for instance, show we have been more reluctant to switch insurance providers than people in the United Kingdom.
The survey from 2012 found just 16 per cent of customers were comparing their cover with others, compared with 66 per cent in the UK. The survey was for motor insurance, but similar forces are at play in home cover.
In the jargon, experts say there is much more "consumer activism" in the insurance market in the UK than here and this has made the market much more competitive.
A likely reason for this is the widespread use in Britain of "aggregators", which allow people to compare the different deals on offer.
Whatever its reasons, our reluctance to shop around probably costs us money.
It won't insulate households from all of the increases in insurance costs, especially those for people in disaster-prone areas. But as more people flex their market muscle, the more insurance companies will have to pay attention.
Frequently Asked Questions about this Article…
Home insurance costs are rising due to the increased frequency of natural disasters like floods, cyclones, and fires. These events have led to higher claims, prompting insurers to raise premiums.
Home insurance costs are rising due to the increasing frequency of natural disasters like floods, cyclones, and fires. These events have led to higher claims, prompting insurers to raise premiums.
To find a good deal on home insurance, it's important to shop around and compare different offers. This is especially crucial as two companies, IAG and Suncorp, dominate about half of the market.
To find a good deal on home insurance, it's important to shop around and compare different offers. This can help you find competitive rates and ensure you're not overpaying for coverage.
Australians are generally less likely to switch insurance providers compared to people in the UK. This reluctance may be due to a lack of consumer activism and the limited use of comparison tools or 'aggregators' in Australia.
Research suggests that Australians are less likely to switch insurance providers compared to people in the UK. This reluctance may be due to a lack of consumer activism and the limited use of comparison tools or 'aggregators' in Australia.
Not shopping around for insurance can lead to higher costs. By not comparing different deals, consumers may miss out on more competitive pricing available in the market.
IAG and Suncorp control about half of the home insurance market in Australia. Their dominance means that shopping around is crucial to finding competitive rates, as they significantly influence market pricing.
Yes, insurance premiums are rising across most regions in Australia. However, Tasmania has seen the sharpest increases, while Victoria's costs have been affected by the removal of a fire levy.
Yes, Tasmania has faced the sharpest increase in home insurance costs, although the trend of rising premiums is occurring across most of the country.
Aggregators allow consumers to compare different insurance deals easily. Their widespread use in the UK has contributed to a more competitive insurance market, encouraging consumer activism.
Aggregators are tools that allow consumers to compare different insurance deals. They are widely used in the UK, contributing to a more competitive market, but are less common in Australia.
Consumer activism, such as actively comparing and switching insurance providers, can make the market more competitive. This forces insurance companies to offer better deals to attract and retain customers.
Yes, shopping around can potentially save you money on insurance. By comparing different policies, you can find better deals and avoid overpaying, even though it may not completely shield you from rising costs.
While shopping around can help you find better deals, it won't completely shield you from rising insurance costs, especially if you live in disaster-prone areas. However, it can mitigate some of the financial impact.
Australians can encourage a more competitive insurance market by becoming more active consumers. This includes using comparison tools to evaluate different offers and being willing to switch providers for better deals.
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