Key Takeaway

When your home insurance premium spikes, you’re not stuck. Contact your insurer first to understand the increase and ask about discounts. Shop around for at least three quotes from other insurers, compare identical cover levels, and review your excess and optional extras. If the increase seems unjustified and your insurer won’t negotiate, lodge a complaint with the Australian Financial Complaints Authority (AFCA).

When the Renewal Notice Arrived

I opened my home insurance renewal notice in July and nearly fell off my chair. The premium had jumped from $4200 to $6950, a 65 per cent increase in one year. My policy hadn’t changed. My home hadn’t changed. I hadn’t made a claim. Yet my insurer expected me to pay an extra $2750 for the same cover.

This wasn’t an isolated incident. According to the Insurance Council of Australia, home insurance premiums across Australia have risen sharply due to increased claim costs, natural disaster frequency, and reinsurance pricing pressures (Insurance Council of Australia, 2026). But a 65 per cent jump in one year still felt excessive.

I wasn’t going to accept it without a fight. Here’s what I did, step by step, and what you can do if you’re facing the same shock.

1. I Called My Insurer to Ask Why

Before doing anything else, I rang my insurer. I needed to understand what was driving the increase. Was it a postcode-wide adjustment? Had my risk profile changed? Was it just opportunistic pricing?

The customer service rep explained that my suburb had been reclassified for flood and bushfire risk, and that reinsurance costs had risen across their entire book. Fair enough, but that didn’t explain why my premium had jumped so much more than the national average.

I asked if there were any discounts I was missing. Loyalty discounts, bundling discounts, no-claim bonuses. She applied a 5 per cent no-claim discount I hadn’t been getting, dropping the premium to $6600. Still far too high, but it was a start.

Lesson: Always call first. Insurers don’t always apply every discount you’re entitled to, and a five-minute phone call can save you hundreds of dollars.

2. I Reviewed My Product Disclosure Statement

Next, I dug out my Product Disclosure Statement (PDS) and read the fine print. I wanted to know exactly what I was paying for and whether the cover matched my actual needs.

I discovered I was still paying for cover on a detached garage I’d demolished two years earlier. I’d forgotten to notify my insurer. I also had accidental damage cover for contents, which I didn’t really need given my careful household.

According to ASIC MoneySmart, reviewing your PDS annually is essential to ensure your cover still matches your circumstances (MoneySmart, 2026). I called back and removed the garage and the accidental damage cover. Another $400 saved.

3. I Shopped Around for Quotes

With my revised premium at $6200, I started getting quotes from other insurers. I used comparison sites and contacted insurers directly. I made sure I was comparing identical cover: the same sum insured, the same excess, the same inclusions.

I got quotes from five insurers. The cheapest came in at $4800 for equivalent cover. The most expensive was $7200. The variation was staggering, and it confirmed that my current insurer was overcharging.

As foundational financial texts like Thrift by Samuel Smiles remind us, prudent management of household expenses requires active comparison and vigilance, not passive acceptance of the first price offered.

4. I Increased My Excess

I was prepared to take on more risk to reduce my premium. My excess had been sitting at $500 for years. I increased it to $1000 with my new insurer, which dropped the premium by another $350.

The trade-off was clear: if I needed to make a claim, I’d pay the first $1000 myself. But given I hadn’t claimed in eight years, the immediate annual saving outweighed the hypothetical future cost.

Consider your claim history before doing this. If you claim frequently, a high excess might cost you more in the long run.

5. I Removed Optional Extras I Didn’t Need

Many policies include optional extras that inflate the premium. Mine had home emergency cover (for things like burst pipes and lockouts) and legal liability cover beyond the standard inclusion.

I assessed whether I genuinely needed these. The home emergency cover cost $180 a year, but a single callout from a plumber would cost me $150 anyway. The extra legal liability was overkill for my circumstances.

I stripped them out and saved another $220.

Read also: Home Insurance Loyalty Penalty in Australia: Why Long-Term Customers Pay More

6. I Improved My Home’s Risk Profile

Some premium reductions require upfront investment. I installed deadlocks on all external doors and added sensor lights to the front and back of the property. My new insurer gave me a 3 per cent security discount, saving $144 annually.

I also cleared vegetation from around the house to reduce bushfire risk. While this didn’t trigger an immediate discount, it made me a better risk, which should help at future renewals.

7. I Switched Insurers and Documented Everything

After all the steps above, I switched to the new insurer at $4450 per year, down from the original $6950 renewal. A saving of $2500.

I documented the entire process: the original renewal notice, the phone calls, the quotes, the policy changes. If I ever need to lodge a complaint or dispute a future claim, I’ll have a clear paper trail.

If my original insurer had refused to negotiate and I’d been stuck with an unjustified increase, I would have lodged a complaint with the Australian Financial Complaints Authority (AFCA), which handles disputes between consumers and insurers at no cost (AFCA, 2026).

Common Mistakes to Avoid

Accepting the first renewal without question. Insurers count on inertia. Always challenge a significant increase.

Comparing premiums without comparing cover. A cheaper premium means nothing if the sum insured is too low or exclusions are broader.

Reducing cover too far. Underinsurance is a false economy. If your sum insured doesn’t cover the full rebuild cost, you’ll be out of pocket after a total loss.

Ignoring the PDS. The PDS and the Target Market Determination (TMD) explain exactly what’s covered and what isn’t. Read them both.

Frequently Asked Questions

Can my insurer raise my premium by any amount?

Yes, insurers can adjust premiums at renewal based on risk, claims experience, and reinsurance costs. However, the increase must be reasonable and disclosed clearly in the renewal notice. If you believe the increase is unjustified, you can complain to AFCA.

Will switching insurers affect my cover?

Not if you compare policies carefully and ensure the sum insured, excess, and inclusions match. Always read the new PDS before committing.

How often should I compare home insurance?

At least annually, when your renewal notice arrives. Market pricing changes constantly, and loyalty rarely pays.

What if I can’t afford the premium at all?

Contact your insurer to discuss payment plans, or consider increasing your excess or reducing optional cover. If affordability is a persistent issue, speak to a financial counsellor or contact ASIC’s MoneySmart service for guidance.

Conclusion

A massive premium increase feels like a punch in the gut, but you have options. Don’t accept it passively. Call your insurer, review your PDS, shop around, and be prepared to switch if you find better value elsewhere. The hour or two you spend on this process could save you thousands of dollars over the life of your policy.

Always confirm current premiums, excess levels, and cover terms by reading the Product Disclosure Statement (PDS) and the Target Market Determination (TMD) before deciding. Coverage, exclusions, and availability vary by insurer and by state or territory. This is general information only and does not take into account your personal objectives, financial situation, or needs. Before acting on it, consider whether it is appropriate for you and consider obtaining personal advice from a licensed insurance adviser.