Why home insurance costs are skyrocketing across Australia

Australians are paying up to $700 more a year for home and contents insurance as new research revealed every state and territory recorded a surge in pricing compared to 2024.

Canstar analysis of 25,000 new customer quotes found the national average annual home and contents premium jumped by 14 per cent, or as much as $343, in the past 12 months.

NSW faced the most significant percentage increase with the cost to insure home and possessions up 18 per cent year-on-year to an estimated $2613 per annum.

Northern Territorians faced a whopping average annual increase of $700 (17 per cent) to $4814 a year, making it the most expensive state or territory for home and contents insurance.

NQ may have experienced the lowest annual increase of home and contents insurance at 2 per cent ($112), but the region’s 2025 average was the second highest at $4624. .

MORE: City regions where prices grew fastest after rate cuts

Flooding in the farming region around Macknade in North Queensland. Picture: Adam Head

The average cost of premiums were also up $431 (16 per cent) in the remainder of QLD, $341 (17 per cent) in VIC, $317 (17 per cent) in TAS, $287 (17 per cent) in SA and $192 (9 per cent) in WA.

Canstar data insights director, Sally Tindall said the increases were a steep climb many households.

“The concern is some may look to downgrade their cover or ditch it altogether,” she said

The Canstar report noted factors such as an increasing frequency of extreme weather events and the high costs of rebuilding and reinsurance could impact the cost of insurance.

“Homeowners across the country are experiencing rising home insurance costs in a year marked by wild weather events in many regions,” Ms Tindall said.

“Claims from ex-Tropical Cyclone Alfred alone have exceeded 125,000 at a cost of $1.36 billion, according to the Insurance Council.”

The Canstar report found households could save $766 on average by switching to a different insurer.

The financial comparison site evaluated insurance policies from more than 45 providers, analysing around 25,000 quotes covering eight regions, three cover types and up to two different sum insured amounts to identify potential savings available by switching to a top-rated insurer.

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Canstar Data Insights director Sally Tindall. Picture: supplied. NSW real estate

The biggest potential annual savings could be found in North Queensland ($1206), Northern Territory ($1172) and the remainder of Queensland ($921).

“If you’re hamstrung between affording cover or going without, try shopping around as a first port of call,” Ms Tindall said.

“Other ways to save include paying your premium annually rather than monthly, with 41 per cent of providers offering up to a 21 per cent discount for paying for the year in one lump sum, or increasing your excess to reduce your annual premium, provided you have the funds to cover the higher excess if you need to make a claim.

“Insurance isn’t just for weather-related damage – it also protects against accidental damage, burglary and theft.

“Even if you’re not in a high-risk weather region, other emergencies, such as a burst water pipe or an overflowing sink, could potentially be covered in your insurance if the emergency wasn’t preventable.”MORE: Good deal: super popular area declared ‘undervalued’

Flooding in Laidley in March after ex-Tropical Cyclone Alfred. Picture: Michael Nolan

AVERAGE ANNUAL HOME AND CONTENTS INSURANCE PREMIUMS

(SOURCE: Canstar)

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