With insurance costs increasing as the cost of living continues to rise, Compare the Market is urging homeowners to consider increasing their home insurance excess to decrease their annual premiums.
The home and contents insurance comparison website crunched some numbers and found that, in one scenario, upping the excess on home insurance from $750 to $1,500 could, on average, was able to save a homeowner 13.99% off their annual premium.* That equates to over $300 worth of savings on the same policy, just with a higher excess. Of course, this means paying the higher excess if homeowners were to claim, so it’s a hack people need to consider carefully.
Compare the Market’s Executive General Manager for General Insurance and home and contents insurance expert, Adrian Taylor, said that at a time when every dollar counts, it’s also important to switch rather than ditch home insurance to protect your home in case the worst happens.
“From bushfires to cyclones and floods, there’s barely been a couple of months without weather events that have caused significant damage to homes across Australia,” Mr Taylor said.
“That said, with the cost-of-living crisis continuing to put pressure on household budgets, we’ve seen many homeowners consider reducing their home insurance coverage or, worse, ditching coverage altogether.”
Previous research from Compare the Market found that 26.5% of Aussies surveyed say they have no home and/or contents insurance – a move that could leave them significantly out of pocket in the event of natural disasters, thefts and other events that cause damage to property or belongings.
“One way homeowners could keep their home insurance premiums down is by increasing their excess,” Mr Taylor explained.
“Our research found that in the one instance we looked at, the homeowner was able to save $346.27 when increasing the home insurance excess by $750. Some insurers also provide options of an excess upwards of $5,000, which could deliver even more savings.
“During our analysis, we also found that an insurer offers home insurance excess levels up to $10,000.
“We urge that people consider their circumstances and weigh the benefits of increasing their home insurance excess.
Mr Taylor’s top tips for lowering your insurance premium.
- Don’t just accept auto-renewals. There’s every chance your next renewal notice will be higher, even if you haven’t claimed. As such, ensure you compare it against others on the market, paying attention to the sum insured, excess and any optional cover you may have.
- Ensure your circumstances are the same. Assess any optional cover that you may have on your policy that you no longer need. Removing these could help you realise even more savings. Similarly, your home’s value may have changed, so you want to make sure you’re insuring it for the correct amount.
- Consider some of the lesser-known insurance providers. The market is always changing and some new players offer policies that can rival those from the bigger brands. In fact, many lesser-known insurance brands are backed by well-known underwriters.
*Disclaimer
Compare the Market compared 16 different home insurance products on the market and reviewed the premium based on each excess level on February 26, 2024. Nine of the 16 insurance policies offered both a $750 and $1,500 excess for their home insurance policy. Averages based on premium differences are based on these nine different insurance products.
Quotes based on a freestanding house costing $750,000 to rebuild in Spring Hill, Queensland on the 26th of February 2024. The home was built between 2000 and 2010, with brick veneer walls and a Colorbond roof, with no home elevation and no Strata titles. The homeowner is a 30-year-old woman, who has a mortgage on the home, but there are no other policyholders listed. The policies quoted do not include accidental damage, flood cover, motor burnout cover or sum insured safeguards, but do include cover for storm and rainwater, fire, theft, escape of liquid, impact at home as well as malicious damage, vandalism, riot or civil commotion cover.
-ENDS-
For interviews and more information, please contact:
Noémi Hadnagy | m: 0433 377 252 | e: [email protected]
Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.
