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Has the cost of Home Insurance spiked again? Here's how to fight rising Premiums

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IAG, whose brands include CGU and NRMA Insurance, has joined other major insurers such as Suncorp in significantly increasing their home premiums, which, according to the Australian Financial Review, has “lifted by 6 percent on average in the past six months” (Suncorp has claimed its premiums would rise by 7 percent).

But it isn’t just the residential market experiencing a price hike. Earlier, we reported of D&O Insurance premiums increasing due to factors such as natural disasters, increases in claims, the COVID-19 pandemic and other global events.

In this instance, IAG cites the higher cost of reinsurance, climate change, the cost of perils (from events such as bushfires and hailstorms), as well as potential losses associated with Business Interruption Insurance claims as the major culprits behind the price hike.

What does this mean for you?

The bad news is, if the world economy continues the way it is, we don’t foresee premiums reducing any time soon.

That being said, we can’t dismiss applying for insurance altogether – after all, the costs of investing in insurance can still be minimal compared to the amount of damage it can protect you from.

Insurance is a crucial part of protecting our homes and businesses. That’s why I’ve been happily working with our clients to minimise these costs while still achieving positive insurance outcomes.

Home and landlord insurance saving tips

Here are some strategies to help you reduce your home and landlord insurance costs:

Get the help of an expert

Every policy is different and contains nuances in the fine print that one may only realise when it’s too late. Although the internet has made it easier to find various low-cost policies with a few clicks of a button, a common mistake people make is signing up to whatever appears to be the cheapest. What may seem like the most affordable option up front may be the most costly decision you make.

An experienced insurance broker understands the fine print in detail; not only that, they have access to numerous policies that are either impossible to find online, or will require countless hours of research to discover. They can help you find the most appropriate cover for your situation at the most competitive premium. Further, if an event occurs where you’ll actually have to make a claim, an insurance broker can work with you on your behalf to make sure the process is streamlined.

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Remember Insurance Brokers work on your behalf and not on behalf of the Insurer, allowing your broker to be your personal claims advocate, ready to assist should any problems arise.

The benefit of engaging in an insurance broker when searching for home or landlord’s insurance is that you receive expert assistance when arranging your cover for a reasonably small cost.

Most of the cost of servicing your policy, including quoting and placement, changes required, any advice or queries throughout the policy life and claims assistance, is offset by the amount paid to the broker by the insurer they help place you with.

Increase your excess

Basically, your insurance ‘excess’ refers to the amount of money you choose to nominate should you need to make an insurance claim.

For example, one Home Insurance policy may give you $10,000 worth of damage cover if you pay an excess of $500. Increasing the excess you pay from $500 to say, $1000, can decrease your premiums.

When considering this, always think about how much you would be able to afford to pay as an excess should a disaster strike. Also keeping in mind that many policies will also apply additional excesses and these can sometimes be significant depending on your location. Additional Excesses are outlined in your Policy Schedule or Product Disclosure Statement.

You don’t want to have a situation where you need to make a claim under the Insurance policy you have purchased but the excess payable is too expensive to afford.

Find ways to reduce your claim history and minimise your risk

The more you claim, the higher your premiums will be and the harder insurance will become to find. Sure, unfortunate events can happen that are beyond our control, but there are certain things we can do to reduce the chances of unfortunate events happening.

For example, not only does installing a home security system (such as locks on windows, security screens and monitored alarm/surveillance systems) help prevent break-ins, but insurers have a preference for secure homes too.

There are also a number of water leakage detectors now available on the market for minimal costs. Some of these detectors can monitor all of your plumbing pipes, fittings and water using appliances on the property and can detect a leak, a tap left running or some other plumbing failure and can some of these detectors can even shut off the water automatically, to minimise water damage and also prevent excess water bills.

If possible, when looking for your next home, research the location and find an area with less history of natural disasters and crime. Many councils have flood mapping tools and other catastrophe mapping tools available which are free for you to use.

Consider the age and condition of the structure, as well as the number of properties you own

As an investor or home buyer, there may be valid reasons as to why you’d purchase an older home. This being said, you need to be aware that the age and condition of your structure, as well as the cost required to reconstruct it, could affect your insurance premium. Especially where a property may be heritage listed.

Other items such as what materials your home is built with, and the number of properties you own could affect your level of premium. Many insurance companies have exclusions within their policies in relation to asbestos, so it is really important that you know if you have any asbestos present in your properties and if you do, where it is and how much is there.

These are just a small number of numerous other strategies you could implement to reduce rising insurance premiums. I know I’m going to sound biased here, but working with a qualified, experienced insurance broker who gets to see the best opportunities on a regular basis from extensive supplier networks can be of advantage – especially when you’re trying to lower your costs whilst ensuring you are still protected.

If you’d like to have a candid chat about how you could find the right fit for your insurance, don’t hesitate to contact us. Alternatively, follow us on Facebook, LinkedIn and YouTube for regular business insurance broker tidbits.

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General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Alishia Oliver, Crucial Insurance and Risk Advisors, ABN 93 166 630 511, AFSL 451450

This article originally appeared on Crucial Insurance Website and has been published here with permission.