Rising Home Insurance Costs Heat Up Household Finances

4

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Sharanjit Paddam, who spearheaded the report at the Actuaries Institute, highlights a troubling trend: home insurance premiums are outpacing wage growth. The median premium for home insurance has soared by 9% in just one year, squeezing household budgets tightly.

One significant driver of these rising premiums, according to Paddam, is the increasingly evident impact of climate change. Extreme weather events, such as devastating bushfires and severe floods, have heightened the risk associated with insuring homes, prompting insurers to hike their prices.

Some households are responding to these changes by searching for cost-saving measures, such as increasing their deductibles or shopping for cheaper coverage options. However, others find themselves forced to forgo home insurance altogether, exposing them to far greater financial risk in case of disaster.

This trend isn't confined to Australia alone. Similar patterns can be observed globally, where rising natural disasters are causing insurance costs to escalate, putting additional financial strain on families already grappling with stagnant income growth and increasing living expenses.

The Actuaries Institute’s findings underline the pressing need for a multifaceted approach to mitigate the impacts of rising insurance costs. This approach could include:

• Investing in improved climate resilience strategies to minimize the damage from natural disasters.
• Proposing policy reforms to balance the insurance markets and protect consumers.
• Encouraging public-private partnerships to develop affordable insurance solutions.
• Enhancing consumer awareness regarding available options and making informed decisions.

The issue underscores an essential challenge for policymakers, insurers, and consumers alike. On one end, there's an urgent need to adapt to the financial reality shaped by climate change, and on the other, ensuring that essential services remain accessible without unduly burdening household finances.

Published:Tuesday, 17th Sep 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

InsurtechLIVE26 Conference Set to Propel Insurance Innovation in 2026

08 Feb 2026: Paige Estritori

Insurtech Australia has officially announced the upcoming InsurtechLIVE26 conference, scheduled for 18 February 2026 at Doltone House Jones Bay Wharf in Sydney. This event is poised to be a pivotal gathering for professionals in the insurance and technology sectors, aiming to explore and advance innovation within the industry. - read more

Climate Change's Impact on Home Insurance Premiums: Insights from IAG

08 Feb 2026: Paige Estritori

Insurance Australia Group (IAG), a leading insurer in the Australian market, has highlighted the escalating impact of climate change on home insurance premiums. The company reports that the increasing frequency and severity of weather events are significant factors driving up the cost of home insurance for Australians. - read more

ICA Advocates for Overhaul of Civil Liability Laws Amid Rising Insurance Premiums

08 Feb 2026: Paige Estritori

The Insurance Council of Australia (ICA) has recently released a white paper highlighting the urgent need for reforms to state and territory civil liability laws, which have remained largely unchanged for nearly 25 years. These outdated laws are contributing to significant increases in public liability insurance premiums, affecting a wide range of businesses across the nation. - read more

APRA Data Shows Significant Rise in Public Liability Insurance Premiums

08 Feb 2026: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has released its latest National Claims and Policies Database (NCPD) statistics, revealing a substantial increase in public liability insurance premiums over recent years. According to the data, premiums have risen by 40% since 2015, a rate that surpasses general inflation and places additional financial strain on businesses across the country. - read more

Upcover Unveils Comprehensive Management Liability Insurance for Australian SMEs

08 Feb 2026: Paige Estritori

Sydney-based insurtech company Upcover has launched a new management liability insurance product designed specifically for small and medium-sized enterprises (SMEs) and sole traders across Australia. This offering aims to provide comprehensive protection against a range of risks, including employment disputes, official investigations, tax audits, financial crimes, statutory liabilities, and allegations of legal breaches. - read more

Click for more Insurance News