How to Save on Property Insurance Premiums in Australia

6 مارس، 2025

0 53 4 دقائق

Property insurance is a crucial safeguard for homeowners and investors in Australia, protecting your most valuable asset from unforeseen events like fires, floods, storms, theft, and other damages. However, the cost of property insurance premiums can sometimes feel overwhelming, especially with rising living expenses and natural disaster risks. The good news is that there are several practical strategies you can employ to reduce your property insurance premiums without compromising on coverage. In this article, we’ll explore actionable tips and insights to help you save money while ensuring your property remains adequately protected.

1. Shop Around and Compare Quotes

One of the most effective ways to save on property insurance is to shop around and compare quotes from multiple insurers. Insurance providers often have different pricing models, discounts, and policy terms, so it pays to do your research.

Tips for Comparing Quotes:

Use online comparison tools like iSelect , Compare the Market , or Canstar to get an overview of available policies.
Don’t just focus on the premium amount—review the coverage limits, exclusions, and excess amounts to ensure you’re comparing apples to apples.
Consider both large insurers (like Allianz, NRMA, and QBE) and smaller, regional providers, as they may offer competitive rates.

Pro Tip:

Some insurers offer loyalty discounts, but don’t let loyalty blind you. It’s often cheaper to switch providers than to renew automatically with your current insurer.

2. Increase Your Excess

The excess is the amount you agree to pay out of pocket before your insurer covers the rest of the claim. By opting for a higher excess, you can significantly lower your annual premium.

Example:

If you increase your excess from $500 to $1,000, your premium might drop by 10-20%. However, make sure you can comfortably afford the higher excess in the event of a claim.

Things to Keep in Mind:

Avoid setting the excess so high that it becomes unaffordable in an emergency.
Some insurers offer a “voluntary excess” option, allowing you to adjust the excess to suit your budget.

3. Bundle Your Policies

Many insurers offer discounts if you bundle multiple policies, such as home and contents insurance, under the same provider. This is known as a multi-policy discount .

Benefits of Bundling:

You can save up to 15-20% on your combined premiums.
Managing one insurer for multiple policies simplifies administration and claims processes.

Example:

If you own a car and a home, consider bundling your car insurance with your property insurance to take advantage of these savings.

4. Review and Update Your Sum Insured

The sum insured is the maximum amount your insurer will pay in the event of a total loss. Overestimating this amount can lead to unnecessarily high premiums, while underestimating it can leave you underinsured.

Steps to Optimize Your Sum Insured:

Conduct a thorough assessment of your property’s replacement cost, including building materials, fixtures, and fittings.
Use online calculators provided by insurers to estimate the correct sum insured.
Regularly review and update your sum insured to reflect changes in property value, renovations, or inflation.

Warning:

Avoid being overly generous with your sum insured, as this can inflate your premium. Conversely, ensure you’re not underinsured, as this could leave you financially vulnerable in the event of a claim.

5. Improve Home Security and Safety Measures

Insurers reward policyholders who take steps to reduce the risk of theft, damage, or accidents. Installing security and safety features can lead to significant premium discounts.

Examples of Risk-Reducing Measures:

Install smoke alarms, fire extinguishers, and security systems (e.g., burglar alarms, CCTV cameras).
Use deadbolts and reinforced doors/windows to deter intruders.
Clear gutters and install roof protection to minimize storm damage.

Discounts to Expect:

Depending on the insurer, you could receive a discount of 5-15% for implementing these measures. Always inform your insurer about any upgrades to your property’s security or safety features.

6. Choose a Higher-Risk Area Wisely

If you’re purchasing a new property, be mindful of its location. Properties in areas prone to natural disasters (e.g., floods, bushfires, cyclones) typically attract higher premiums.

Tips for Reducing Location-Based Risks:

Research the history of natural disasters in the area before buying.
Consider properties with flood defenses, fire-resistant materials, or other protective features.
If you already own a property in a high-risk zone, work with your insurer to mitigate risks (e.g., installing flood barriers or firebreaks).

Government Assistance:

In some cases, government-backed schemes like the National Insurance Affordability Initiative may help reduce premiums for properties in disaster-prone areas.

7. Maintain a Good Claims History

Your claims history plays a significant role in determining your insurance premium. Frequent claims can lead to higher premiums or even policy cancellations.

Strategies to Maintain a Clean Claims History:

Only file claims for significant losses; minor repairs might be cheaper to handle out of pocket.
Avoid making multiple claims within a short period.
Be proactive in maintaining your property to prevent avoidable damages.

Bonus:

Some insurers offer a no-claim bonus or discount for policyholders who haven’t made any claims over a specified period (e.g., 3-5 years). This can result in savings of up to 20%.

8. Pay Annually Instead of Monthly

While paying monthly premiums might seem more manageable, it often comes with additional fees or interest charges. Paying your premium annually can save you money in the long run.

Example:

If your annual premium is $1,200, paying monthly might cost you $105 per month (totaling $1,260), whereas paying annually would save you $60.

Tip:

If cash flow is an issue, consider setting aside a small amount each month in a dedicated savings account to cover the annual payment.

9. Loyalty Discounts vs. Switching Providers

While loyalty discounts can be tempting, staying with the same insurer for years without reviewing your policy can cost you more in the long run. Many insurers offer attractive discounts to new customers, which existing customers may miss out on.

Steps to Take:

Review your policy annually and compare it with other providers’ offers.
Negotiate with your current insurer for a better rate, especially if you’ve been a loyal customer.
Don’t hesitate to switch providers if you find a better deal elsewhere.

10. Consider Exclusions and Optional Covers

Not all optional covers are necessary for every homeowner. Carefully review your policy to identify any unnecessary add-ons that are inflating your premium.