Australians are being hit with steep increases in home and contents insurance, with new Canstar figures showing average premiums are up 14% over the past year. The average household now pays $2,795 annually, compared with $2,452 in 2024.
The biggest increases have been recorded in New South Wales, where the average cost jumped 18% to $2,613. Victoria, South Australia and Tasmania each rose 17%, while Queensland premiums climbed 16% to $3,166. The Northern Territory saw the highest dollar increase, with the average policy rising $700 to $4,814. Even in North Queensland, already one of the most expensive regions, prices ticked up another 2% to $4,624.
According to Canstar data insights director Sally Tindall, the rise is linked to a combination of extreme weather claims and broader cost pressures.
“Homeowners across the country are experiencing rising home insurance costs in a year marked by wild weather events in many regions. Claims from ex-tropical cyclone Alfred alone have exceeded 125,000 at a cost of $1.36 billion, according to the Insurance Council,” Tindall said.
She warned that higher premiums could tempt some households to reduce or cancel cover: “Canstar research shows the average new customer home and contents insurance premium has risen by $343 in the space of 12 months. That’s a steep climb for many households, and the concern is some may look to downgrade their cover or ditch it altogether.”
The analysis suggests there are savings to be made by switching insurers. Canstar found that moving from an average-priced policy to a five-star rated option could cut annual costs by about $766 nationally, or 27%. In Queensland, that difference equated to $921, while in the Northern Territory it reached $1,172.
“If you’re hamstrung between affording cover or going without, try shopping around as a first port of call. Canstar research shows switching from an average-priced policy to a top-rated one at a lower premium could save $766 in one year,” Tindall said, adding that opportunities to switch aren’t limited to renewal time.
“Your renewal notice is a good prompt to shop around but keep in mind if you spot a good deal outside of this time, Canstar’s analysis shows 85% of insurance providers don’t charge a fee for early cancellation, and for those that do, fees are typically just $30 and $40, a small cost compared to the potential to save hundreds on your annual premium.”
Other ways to cut costs include paying annually rather than monthly, with 41% of providers offering discounts of up to 21%. Policyholders may also opt for a higher excess to reduce premiums, but Tindall noted this is only a safe option if the household has funds available to cover the larger out-of-pocket expense at claim time.
