Canstar says Australian homeowners could save an average of $766 a year by switching home and contents insurance policies, as premiums rise faster than many household budgets can absorb.
The comparison site’s latest research found the average annual home and contents premium rose 14% nationally in the 12 months to September 2025. The increase comes as the federal government sets aside $3.4 million over four years for measures aimed at reducing property insurance costs and unintentional underinsurance.
For households facing higher renewal notices now, Canstar said the more immediate savings may come from reviewing their own policy.
Its analysis of around 25,000 quotes from 45 providers found a homeowner with an average-priced home and contents policy could potentially cut their annual premium by 27% by moving to a 5-star rated policy. Nationally, that would bring the average cost down from $2,795 to $2,029.
The possible savings were larger in some parts of the country. North Queensland had the highest estimated saving at $1,206 a year, followed by the Northern Territory at $1,172 and Queensland at $921. Canstar estimated savings of $732 in New South Wales, $670 in Tasmania, $649 in Western Australia, $635 in Victoria and $608 in South Australia.
But many homeowners may not be checking whether a better deal is available. A Canstar survey of 5,484 Australians with home and/or contents insurance found only 19% had switched providers in the past two years, while 33% had never changed providers.
Canstar.com.au data insights director Sally Tindall said home insurance remained a major household expense, particularly for people in higher-risk area: “While this Federal Budget measure to put downward pressure on prices is welcome, at an investment of just $3.4 million over the next four years, it’s hard to see it making an impact.”
The issue is not limited to premiums. Canstar also pointed to rising construction costs, which can leave homeowners underinsured if their cover no longer reflects the current cost of rebuilding or repairing a property.
Citing the latest ABS Producer Price Indexes data, Canstar said house construction prices rose 4.1% in the 12 months to March and were 47% higher than six years earlier, before COVID.
That means homeowners looking to lower premiums also need to be careful about cutting back cover too far.
“The good news is shopping around can make a difference for most homeowners, with Canstar research showing a typical household could knock the cost of their insurance down by 27% by switching from an average-priced policy to a 5-star rated one. While it’s great to see the government acknowledge and take steps to tackle the rising issue of insurance unaffordability, households should not wait for changes to flow through the system, but instead take control themselves,” Tindall said.
Canstar said homeowners should avoid automatically renewing their policy each year, compare what is included and excluded, and review rebuild costs annually. It also said policyholders can adjust their excess or sum insured to reduce premiums, but any savings may come with higher costs or risks if they need to make a claim.
