Brokers reviewing home and residential sums insured this renewal season are working against rebuild costs that have risen roughly a quarter faster than consumer prices over five years, with the steepest increases concentrated in exactly the materials that hail, storm and cyclone destroy. New analysis released today by the Insurance Council of Australia (ICA) puts a standard home in Queensland and northern Australia at around 45% more expensive to build than it was in 2021 - a gap that leaves any policy schedule still resting on pre-2022 assumptions materially short.
The analysis, published as part of the ICA's annual Insurance Catastrophe Resilience Report, draws on Cotality's Cordell Construction Cost Index (CCCI). It shows building costs rose around 30% in the five years to March 2026, against consumer price index growth of about 24% over the same period.
The divergence is not evenly spread across a build. According to the ICA analysis, roof tiles increased 77% in five years - more than three times the rate of CPI. Windows, plaster, plywood, copper piping, structural steel, cement and concrete climbed between 37 and 48%.
Roof, window and plaster products recorded some of the largest increases of any category. Those are the components most commonly damaged by hail, storms and cyclones, which means a claim profile weighted toward roof and glazing damage now inflates faster than the overall build.
Labour followed the same pattern, with roofers and glaziers recording the most significant wage growth of the trades measured.
The ICA also reported that the repair cycle is competing directly with housing supply. Between 2022 and 2026, insurers received more than 400,000 claims to repair or rebuild homes damaged in declared events, at an insured cost of $11.3 billion.
In 2025 alone, declared events damaged 145,392 homes - almost as many as the 172,657 new homes completed nationally that year.
The loss year behind those figures was heavy. The report shows seven declared events in 2025-26 generated more than $3.98 billion in insured losses, up more than $1.7 billion on the previous year. The largest single event - storms and hail across Queensland and New South Wales last November - generated incurred costs of $2.2 billion from more than 95,600 claims.
"Inflation in building costs is adding real pressure to the cost of premiums year on year," said ICA CEO Andrew Hall (pictured). "Every insurance claim draws on the same builders, trades and materials needed to deliver new housing, stretching an already constrained construction sector even further."
Hall pointed to demand pressures still ahead of the sector.
"Shifting market demands for AI data centre construction and the 2032 Olympic Games will add further demand into an already stretched sector," he said.
The immediate broker consequence sits in the sum insured, not in Canberra. Where rebuild costs in a client's postcode have moved 45% since 2021 and the schedule has been indexed at CPI, the shortfall compounds silently until a total loss exposes it. The problem is already documented - Insurance Business has reported on how rising home premiums are deepening the insurance protection gap across Australia, with underinsurance concentrated in the owner-occupier segment.
There is a counterweight for hazard-exposed clients. Several insurers have begun recognising resilience ratings in home premium pricing, which gives brokers a documented route to argue mitigation works down into the peril component of a premium. That sits alongside the industry's broader position on why insurers say an emissions focus alone won't protect the market.
Hall framed the fix as a housing question rather than a disaster one. "Resilience investment is not just good disaster policy, it's good housing policy that stacks up economically," he said. "Australia will not tackle the housing shortage while disasters keep pushing existing homes back into the repair queue, which is why resilience investment must be a core part of the Government's national housing strategy."
The full report is available through the Insurance Council's annual catastrophe reporting resource page. Cotality publishes the underlying Cordell Construction Cost Index quarterly for national and state markets.
