The value of brokers in helping clients find cost-effective insurance cover is shining even brighter today, with a new analysis showing that some insurers are quoting more than twice the price of others for home insurance premiums on identical properties.
An analysis of home insurance prices released by ESL Insurance Monitors Allan Fels and David Cousins found that the highest premium was on average more than double the lowest in the market, with the average of the total premium across all locations in May at $1,813.
The findings were based on a monthly comparison of quotes for 12 major brands of household property insurance covering identical properties in 11 locations across NSW.
“This survey of premium prices quoted by 12 major insurers shows there are significant variations in pricing between brands for essentially the same insurance cover,” Fels said. “There is no doubt that many consumers could save hundreds of dollars by shopping around and switching to a cheaper supplier.”
Pricing also varies greatly between locations – but that was perhaps more expected given factors such as risks of natural perils and other factors specific to each location.
Among all insurers, only Comminsure retained the same emergency services levy (ESL) rate in May this year as it had charged in April. Comminsure reduced its ESL rate from 23% to 18.5%.
The analysis also showed that insurance giant Suncorp had hiked charges in May by 17.5% on average across the locations surveyed – the basis of which substantial increase is being investigated by the insurance monitor.
“Suncorp needs to demonstrate that the re-establishment of ESL is not being used as an opportunity
to increase base premiums unreasonably,” Fels said.
The latest increase saw Suncorp move from the usual below the sample average to just above the market average. Since May 2017, the Brisbane-based insurer has made a 24% average total premium increase, compared with the survey average increase of 14%, it said.
Since last May, base premiums have jumped an average of 2.5% across the major brands. Compared to the previous month, total premiums, averaged across all locations and insurers, in May, saw an overall increase of 0.8%.
“Much of the increase in total premiums across the survey can be attributed to the re-establishment of ESL, since many companies were charging low rates of ESL in May 2017 as ESL was then being removed,” the insurance monitor said in a statement.
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