Significant Surge in Home Insurance Costs Across Australia

The latest data from researcher Canstar reveals a notable surge in home and contents insurance prices, with an average increase of 14% over the past year.

This study, which analyzed around 25,000 new policy quotes, found the current average cost to be $2795, compared to $2452 previously.

Among the states, New South Wales experienced the most significant rise, with a noteworthy 18% increase to $2613 from $2210. The Northern Territory recorded the highest dollar increase, with premiums going up by $700 to $4814, reflecting a 17% rise. Consistent 17% growth was seen in Victoria, South Australia, and Tasmania. In contrast, Queensland, excluding its northern parts, saw a 16% hike. Western Australia and Northern Queensland were the only regions with single-digit increases.

Sally Tindall, Canstar's data insights director, highlighted that these increased costs coincide with a year dominated by severe weather events affecting multiple areas. Tindall expresses concern that such financial strain might compel some households to either reduce their coverage or forgo insurance altogether.

In addition to price changes, Canstar announced the winners of its home and contents insurance awards. Companies recognised include AAMI, Allianz, QBE, and Westpac, among others.

The rising cost of home insurance has substantial implications for Australian homeowners, potentially stretching household budgets and driving consumers to reevaluate their coverage options. This trend is significant given the vulnerability of property to extreme weather conditions, which are seemingly becoming more frequent. Insurance companies may be forced to adjust their risk assessments and pricing strategies accordingly, impacting consumers directly.

Looking forward, the insurance sector may face increased scrutiny and pressure to balance financial viability with consumer affordability. Experts anticipate that insurance companies will continue to refine their risk models, possibly resulting in more tailored policies or incentivising risk mitigation measures by homeowners. Further developments could see increased competition among insurers to offer more sustainable insurance products amid a changing climate. As stakeholders await these moves, consumers are advised to regularly review their policies to ensure adequate coverage.

Published:Thursday, 25th Sep 2025
Source: Paige Estritori

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Knowledgebase

Insurance Deductible:
That part of an insurance claim that must be paid by an insured person before the the balance is paid by the insurer.

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