The following research report dives into the habits, priorities, and challenges we face when it comes to insuring our homes and belongings.
“Reviewing how often we compare policies, the factors driving our choices and the savings on offer can help us understand what to look for,” says AJ Duncanson, Mozo Expert Choice Awards Judge.
"It can also help us to identify our common pitfalls and potentially find a better deal on our insurances."
"This report aims to empower consumers to make more informed policy choices."
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Australians are now paying an average of $3,499 a year for their home and contents insurance, which is whopping 9% jump in premiums over the past 12 months.
Looking at the average premiums across hundreds of thousands of quotes, this 9% jump equates to roughly $288 more Australians are paying every year for their home and contents insurance policies.
Mozo surveyed over 1,000 Australians with home and contents insurance to see how often they were comparing their policy to others on the market.
Close to 1 in 5 (18%) admitted they rarely compare, and almost 1 in 10 (9%) say they have never compared policies.
This means hundreds of thousands of policy holders could be missing out on potential savings.
High premiums are putting pressure on household budgets and stretching our wallets thin.
However, Mozo research shows 21% of us are still opting for insurers that we know and trust.
This means 1 in 5 choose well-known brands, rather than those providing the lowest cost policy or best quality coverage.
The good news is that the majority of policy holders (63%) understand that when it comes to choosing a policy, looking for the lowest price or best level of cover are the two most important factors.
Home and contents insurance comes with a host of different inclusions, so we asked Australians which cover was most important to them when choosing an insurance policy.
Mozo research shows that contents cover is top of mind for 40% of policy holders, followed by cover for natural disasters (30%), then theft or burglary (17%).
The least important factors were legal liability (7%) and cover for trade tools or home office equipment (6%).
When asked why they have home and contents insurance, 80% of policy holders surveyed cited the obvious: protecting their items.
However, 66% value the peace of mind it provides, 13% got it with their home loan, and 7% have it after suffering past losses from natural disasters.
For those prioritising security, regularly comparing policies can help to ensure coverage aligns with their evolving needs and financial circumstances.
Most insurance policy switchers (65%) moved for lower premiums, followed by a lower excess (21%) and a higher level of cover (16%).
1 in 10 switched to consolidate all policies, but a small cohort (7%) were forced to switch as their insurer would no longer cover them. A quarter of those who stayed loyal said comparing was too difficult, but a small cohort were found to be prisoners in their current policies.
A whopping 76% stayed loyal due to satisfaction, but reading on, you’ll see this loyalty may be blind.
While 43% of respondents haven’t switched home insurers because they’re happy with their provider, a cohort of these policy holders do not actively compare - so could they be happier?
Mozo looked closer at the survey data, to see whether the group who have not switched, because they're "happy" with their current provider, are actively looking at other policies available to them.
The data showed that only 52% of this group compare annually, and 21% say they “rarely” do.
A whopping 1 in 10 (11%) who said they were happy have never compared policies at all.
This suggests that even within the satisfied group, some may be missing out on potentially better rates and coverage options by not regularly assessing the market.
Almost 1 in 3 (27%) Australian opting out of insurance have cancelled recently due to costs. Interestingly, 25% admitted they haven’t even considered it.
For some, it has always been out of reach price-wise, with 23% admitting they’ve never been able to afford it.
22% said they preferred to save an emergency fund instead, 10% said it was a challenge to estimate their contents' value, while a small cohort (5%) said they don’t believe in insurance.
However, it's essential to remember these figures represent averages, and not everyone will achieve the same savings.
Additionally, lower premiums may result in reduced coverage, so consumers should carefully compare policies and assess their needs before switching, to ensure they get the best balance of cost and coverage.
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Home and contents insurance costs in Australia vary significantly by state. SA offers the lowest average premium at $2,053, followed by WA at $2,421. The ACT and Tasmania both have an average premium of $2,618, and Victoria follows closely at $2,883.
NSW has one of the highest average premiums at $4,168, likely due to some of the highest sum insured values. However, QLD ($4,398) and the NT ($4,547) top the list, as homes in these states are more at risk of natural disasters, which significantly increases the cost of premiums.
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The type of construction material significantly impacts home and contents insurance premiums in Australia.
Homes made of double brick have an average premium of $2,932, while brick veneer homes average $3,429. Fibro homes have a higher average premium of $3,919, followed by timber homes at $4,105.
Metal homes average $4,295, and concrete homes have the highest average annual premium at $4,506.
For lower-priced homes valued between $300,000 and $400,000, the average premium is $2,094 a year.
Moving up the scale, homes valued between $400,000 and $500,000 cost $2,480 a year to insure on average, while $500,000 to $600,000 properties sit at $2,855.
For properties valued between $600,000 and $800,000, the average premium increases to $3,493, and those priced over $800,000 face the highest average premium of $4,834.
Homeowners who do not install deadlocks, key-operated window locks, or alarms face higher annual home insurance premiums on average. Specifically, those without an alarm may pay up to 10% more on average.
Investing in security measures not only protect your home but can also lead to substantial savings on insurance costs. By securing your property, you can mitigate risks and qualify for lower premiums, making proactive investment in home security a financially wise decision.
To find the insurers offering the best value or highest quality policies, Mozo analysed 162,088 home and contents insurance quotes from 32 providers across 55 policies. You can read the Mozo Experts Choice Awards for Home & Contents Insurance methodology report, which contains more details about the process of our analysis, here.
The data used in this report was collected between June-August 2024 as part of the awards judging process. Mozo also commissioned a consumer survey to find where the savings opportunities lie for home and contents insurance policy holders in Australia. A nationally representative survey of 1,265 Australians aged 18 and over was commissioned via Researchify.
