⬆ Home and/or Content Insurance Increases

Money
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With the increase cost of living, home and/or contents insurance hasn’t been spared from price increases. Some of these price increases are due to higher costs of providing insurance (wages, interest rates, reinsurance costs) whilst other increases are due to a larger number of claimable events being received by insurers.

There are many reports in the media that some premiums have jumped, and what may be seen by some as unreasonable amounts. One such recent report is that a home and contents policy policy renewal premium increased around 400% on the previous year.

Insurance is about spreading the risk. If one has home and/or contents insurance, they hope that they never face a situation where they need to use it. The premiums paid spread the risk to each individual, allowing those who do need to have a claim, to be able to claim against the cover they have. Those who don’t make claims, are supporting other consumers who need to make a claim to taken the burden off them when a claim is made (hence risk spreading).

Notwithstanding this, if one lives in a higher risk area (cyclone region, bushfire area etc), premiums also increase to reflect the risk (or higher probability) of claims being made. This is done to reduce the burden on those who live in areas where they don’t face the same risks.

Many consumers will be finding that their home and/or contents insurance has increased substantially, even though they live in the same house and haven’t done anything to cause an increase in their premiums.

Let us know how much your home and/or contents insurance premium has increase from the last two bills you have received. It will be the premium paid in 2022 compared to 2023, or 2023 compared to 2024.

Let us know how much your insurance premium has increased with the last two policy renewals. My premium has

  • has reduced (reduced more than 10% on the previous year)
  • is about the same (within 10% of previous year)
  • increased by 10-20%
  • increased by 20-30%
  • increased by 30-40%
  • increased by 40-50%
  • increased by 50-75%
  • increased by 75-100% (almost doubled)
  • increased by 100-200% (almost tripled)
  • increased greater than 200% (tripled or more)
  • or I don’t have home and/or contents insurance
  • or I cancelled my home and/or contents insurance due to the cost
0 voters

Now the maths. To assist you in working out the percentage change between the two bills, use the following equation:

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For example, if this years premium is $2500, and last years premium was $2000, the equation would be:

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For a 25% increase, select the increased by 20-30% above.

Note: A negative percentage means your premium has decreased.

Below you are more than welcome to provide information if you know why there has been a change to your home and contents premium . Did if there has been anything you have done to try and reduce the premium (increasing excess, shopping around etc)? If you tried to reduce your premium, did it work?

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I am assuming you want us to use the Total amount payable, not just the base premium?

Using Total, our bill went up 20.8%, but that came off a 3.8% DROP due to the bushfire mapping no longer designating any area of concern on our property. The increase is made up of an automatic increase to our sum insured for home and contents (up 8% & 5%) GST up by $60, stamp duty up by $60. Our base premium was up by $603 (20.4%). State taxes may be different from place to place.

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Yes, the total amount payable as this is what impacts on the ‘hip pocket’ and and individuals finances/budgeting.

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My home and contents insurance increased by 33 1/2% in October 2023, so I sought online quotes from a number of insurers including the insurer with whom I had my existing policy

As I find every year that I do this, the quote that I received from my own insurer was less than the amount on the renewal notice. Viz, there is no reward for loyalty as an existing customer. Instead, when you get a quote for the exact same insured amount with the exact same excesses, at the very same address that they already have in their records, the quoted price is always lower than that on the renewal notice. That difference this time was $320.

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That is conventional wisdom and what I always expected but my AAMI policy has always re-quoted higher than my renewal notice; other companies have been many $100’s higher. No claims in 22 years at the address and none prior.

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You have to take into account the coverage. I know people who ditched their insurer for a cheaper one only to find some things previously covered weren’t covered in this one.

I was in Charleville Qld early 1990’s when it was flooded. The aftermath revealed just how fragmented the insurance coverage was. Some got prompt payment for everything, some were denied due to the definition of flood, or not having ticked flood, storm & tempest option, some discovered their insurance was just junk. I stuck with Suncorp because they automatically covered flooding by river rises.

The people who bought our old house went with Youi and saved a few dollars, but they had to remove all trees from around the house which cost them $thousands and increase their excess, which ultimately meant the deal was much dearer. The house had stood for 100yrs and only had one claim, for hail damage on the corrugated iron roof 30yrs previous.

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My HC Insurer changed providers and the renewal was 30% higher for less coverage, (previously replacement building). I completed a detailed online questionnaire to get a rebuild value and also rechecked my contents value. This program came out way higher than expected. I also checked on the Cordell web site. Once I was confident of the replacement values I shopped around, checked the fine print and bought for less. This exercise is also a reminder to photograph assets and make sure receipts are backed up in case of total loss.

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This is good advice.

When determining contents value, it is important to understand how the insurance replacement works. Many offer ‘new’ for ‘old’ replacement for many things. This means that even though something you may think has no or limited value (say a 5 year old TV one might think is worth $100), insurance policies may replace it with a ‘new’ items when a claim is made (a replacement new TV might cost $2000). When working out content values, it is important to value based on their replacement and not what one thinks their current worth is. Not doing so will mean one is significantly underinsured and could cause an insurance company to trigger underinsurance clauses in the insurance policy.

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While not explicitly having to do with the premium or setting contents values, another aspect of how ‘new for old’ replacement often works using the TV example, the old TV might have been a top of the range expensive model, but say 5 years on ‘policy 1’ might replace it with one of closest similar specifications not one of similar market or range positioning; and ‘policy 2’ one of similar value. As technology marches on ‘policy 1’ might deliver an entry level model of the same size, or as close as the market will supply at the time while ‘policy 2’ might deliver the best available for the price point insured, and either might elect to payout the customer rather than deliver a replacement TV.

‘new for old’ is usually defined in some manner in the PDS but what the words mean is not always what the consumer thinks they mean. It is a good question to ask prior to buying a policy when it is not made clear in their documents.

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The other thing to consider is that in the event of total loss, you’re unlikely to be in a position to seek out second hand items. You’re likely going to need to just buy everything you need in a hurry.

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Yes I have found this to be true as well. I saved $400 late last year doing the same as you. Also you will get varying prices when getting quotes from insurance companies who are using the same underwriter.
underwriters

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15

Like many I was not happy when my H&C insurance premiums went up 50% at the end of last year. Just at the end of the year I made a claim which I have not done in decades.

On Boxing Day a quick storm interrupted lunch and peppered the place with hailstones from the size of golf balls up to oranges. No, not imaginary oranges or inflated oranges, actually that big. I have never seen anything like it and I spent many decades in Sydney, but for Darwin, the storm capital of Oz.

The result after 5 minutes was the roofs of the house and two sheds were ruined, the solar hot water and two-thirds of PV panels destroyed. I am no quantity surveyor but my guess is all that will cost something like $80,000 to replace, possibly more.

Looking at the many splits and holes in the steel roof of one shed the assessor said he had never seen anything like it. Luckily the other two are well dented but not punctured so I not typing with buckets all around.

In the yard were three cars and a caravan owned by visitors. Two have been written off and the other two are yet undecided. None were a new Mercedes Benz but another guess is that total cost will be $150,000 plus.

I have two observations:

  • I begin to see why insurance premiums are going up.

  • Not all metal roofs are created equal, something that those thinking of building might like to consider.

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It might save some pain in the future. Our bright finished corrugated metal roofing is heavier than the common gauge of modern sheet. I doubt however it will make any difference in the assessment of our future premiums.

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Most insurance companies replace hail dented roof, even if the sheeting is still water tight. I was surprised in the 2014 Brisbane hail storm that every metal sheeting roof with minor dents was removed and replaced. I was a bit gobsmacked when all the roofs were replaced, but, one of the project managers within the insurance company we had provided some information to why.

The first reason why slightly dented roofs is replaced is that the sheeting manufacturers don’t provide warranties for damaged/dented roofs meaning that the insurance company in effect may have additional claims in the future should it be found that the dents caused premature failure within the sheeting warranty period (most insurers don’t want to be take over a claim which may occur during the warranty period).

The second being that if water can sit in the dent, it can become a point of corrosion as water (as well as dust and salts) can sit there increasing the risk or accelerated corrosion. The corrosion has the potential to result in long term leaks. Again, there is a risk of additional claims in the future.

Now dented roof replacement occurs which bumps up cost of claims and flows onto insurance premiums.

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That is my understanding and the assessor indicated that was his recommendation.

It will be interesting to see if their project manager is up to getting the old solar panels and hot water off, replacing the roof and getting new gear back on top without allowing water in or for the smell of BO to repel the workers. Having an APC in a bucket or a cold shower is not attractive but there may be no choice.

I never thought I would say so but I will be joining the great unwashed for some time, hopefully no more than a few weeks, but I am not betting on it.

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We watched many of our neighbours transition to new roofing after a big hail storm several years ago.

The roofers had large teams with a sequence of prep, sectionalising work and ensuring any roof panels removed were able to be replaced within each days work. IE minimising exposure to rain entry.

The more complex jobs required Solar PV to be removed and replaced, done in advance by licensed electrical contractors, and reinstated by same. Similar for solar HWS. The roofer usually organised. (We could not get our local sparky for months they were so occupied removing and reinstalling PV systems).

Noted PV panels mostly seemed to have survived. Internal roof insulation was typically found to be damp and also replaced. Depending on the house age and design there may have been no sarking/water proof membrane installed under the roofing iron leading to the ingress.

It’s worth looking to your home insurance policy for accommodation cover if your home is unable to be lived in during the repairs. Not all have it.

In some rural areas though the local roofer options may be one man and his dog. Another one of those licenced trades that is part of the plumbing profession. Assume the scope includes new gutters?

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I don’t know as the insurer has not made an offer yet. The assessor accepted that the downpipes (polymer) were a casualty but did not mention gutters, in principle they can be done separately.

Not in my case, I cannot say if they will try to reuse the ones that are not obviously smashed. Not my circus, not my monkeys.

So far the only thing that has happened quickly or efficiently is me making a claim online. We received a form letter advising their receipt of the claim. It lists the steps that need to happen. Step one is to prove ownership, after a week of calls and recalls I am yet to speak to the claim manger or anybody else who will tell me how. I live in hope of improvement.

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If you wish and delays are of concern, first advise your insurer that you will be contacting AFCA if you do not hear from your claims manager within a reasonable time (considering that it will have been a wide area of effect) then contact AFCA with your concerns after that time has elapsed if there has been no action or satisfactory action/contact. If you have alternative accommodation available under your policy, this reasonable time period should be quite short as accommodation should be able to be authorised very quickly. In 2011 after the Brisbane floods, our insurance released temporary accommodation funds within 2 days.

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The offer has arrived and covers replacing all the roofs, some damaged metal walls, the solar hot water, solar panels, downpipes and a few misc bits and pieces. It does not include the guttering which to my inspection is not damaged.

This all looks quite fair to me, as I built the house I have some idea what I am looking at. For those who have no idea what they are looking at there is no choice but to accept and pray unless you want to hire your own assessor and go into a long dispute. All up it is $83,000, maybe I should have a new career as an assessor/ quantity surveyor :blush:

So after 3 and a bit weeks they have come good, the case manager eventually returned our calls. All is done from their responsibilities, it is now up to the appointed builder to come and make a start.

Given the massive weather damage all up and down the east coast in the last few weeks the performance from the insurer was not too bad if you overlook their poor communication along the way.

It remains to be seen whether the builder can get going in a reasonable time and juggle all the balls getting the house and its panels done in this showery and stormy weather without allowing any water in. I have a bad feeling that roofers anywhere near me may be in short supply.

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