About 1.6 million Australian households are estimated to be under home insurance affordability stress, based on Actuaries Institute analysis reported by Guardian Australia. That is roughly 15 percent of households, using a definition where basic home insurance premiums take more than four weeks of gross household income. It is not a count of every person who feels worried, but it is the clearest public benchmark for how widespread the pressure has become.

What the 1.6 million figure means

The 1.6 million figure refers to households, not individual Australians. A household may include one person, a couple, a family, or shared occupants, so the number of affected people is likely higher than 1.6 million.

According to Guardian Australia, the Actuaries Institute report found that affordability-stressed households were paying more than A$5,200 a year for home insurance, more than double the average premium reported in that analysis (Guardian Australia, 2024). The same report said median home insurance premiums had risen 9 percent over 12 months, with much sharper increases in some flood and cyclone exposed areas.

In plain English, this means the worry is not just about higher bills. It is about households being forced to decide whether to keep full cover, reduce cover, raise the excess, remove optional benefits, or risk going uninsured.

Why home insurance feels harder to afford

Home insurance premiums are affected by several moving parts: rebuilding costs, labour shortages, claims frequency, natural disaster risk, reinsurance costs, insurer expenses, and state taxes or charges. Flood, cyclone, bushfire, storm surge and severe storm exposure can make a major difference to a premium, even between nearby suburbs.

The Insurance Council of Australia provides consumer resources that explain insurance concepts and disaster related cover issues, including the importance of understanding what a policy includes before a claim is made (Insurance Council of Australia, 2026). For home and contents cover, that usually means checking whether you have building cover, contents cover, or combined home and contents cover, and whether flood is included, optional, limited, or excluded.

ASIC MoneySmart also warns consumers to understand insurance before buying and to compare the cost, features, exclusions and claims process, not just the headline premium (ASIC MoneySmart, 2026).

Read also: Why Home Insurance Premiums Are Rising in Australia

What to check before cutting cover

If your renewal has jumped, avoid cancelling or reducing cover before checking the consequences. Start with these points:

  1. Compare the sum insured with current rebuilding costs, not the property sale price.
  2. Check whether flood, storm, temporary accommodation, debris removal and rebuilding compliance costs are included.
  3. Compare the excess. A higher excess may reduce the premium, but it also increases what you pay at claim time.
  4. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD), especially exclusions and limits.
  5. Get quotes from more than one insurer using the same cover settings, so the comparison is meaningful.
  6. Ask your insurer whether mitigation work, security improvements, bundling, or a different excess could reduce the premium.

The biggest risk is underinsurance. A cheaper policy can become very expensive if the sum insured is too low or if a key event, such as flood, is not covered.

If you cannot resolve a problem with your insurer

If you believe your insurer has handled a renewal, claim, delay, hardship request, or complaint unfairly, complain to the insurer first and keep written records. If the issue is not resolved, the Australian Financial Complaints Authority explains how eligible consumers can escalate a complaint about financial firms, including insurers (AFCA, 2026).

Bottom line

The best short answer is that about 1.6 million Australian households are struggling with home insurance affordability, and many more may be concerned about renewal increases. Before reducing cover, compare policies carefully, check the PDS and TMD, and make sure any savings do not leave you exposed to a loss you could not afford.

General advice warning: This information is general only and does not take into account your objectives, financial situation or needs. Before acting on it, consider whether it is appropriate for you, read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD), and consider obtaining personal advice from a licensed adviser. Cover, exclusions and availability vary by insurer and by state or territory. For legal or tax questions, speak with a solicitor or registered tax agent.