Home insurance cost surge sparks warning for loyal consumers

Insuring a home and its contents has never been more expensive amid a fresh warning for consumers to check that they’re not being ripped off.

Australians are being urged to check their home insurance policies after some providers have quietly lifted peoples’ premiums by 50 to 100 per cent in the past two years.

Frustrated customers are complaining to consumer groups, online chatrooms and insurance companies’ social media feeds about the hefty price rises.

Money specialists say customers are being penalised for their loyalty, and urge people to compare prices and shop around because insurers often charge cheaper rates to new customers and ignored existing ones.

Recent examples of insurance premium pain include:

• A person’s home and contents insurance policy surging from $1200 to $1900 in just one year despite no changes to their circumstances.

• Another customer’s $700 annual rise being blamed on floods in Queensland even though they don’t live in Queensland.

• An annual landlord insurance premium jumping from $1100 to $2300 in two years.

• A customer slugged with an $1800 premium and then finding similar cover at another insurer for $750.

Consumer group Choice is hearing of “big increases” in home insurance premiums that often hit people who have been with the same insurer for a number of years.

“Insurers don’t reward loyalty anymore – they penalise it,” Choice insurance specialist Jodi Bird said.

MyBudget founder Tammy Barton said insurers would often match a competitor’s quote.

He said people should know what they were paying for because cover could vary widely, and he recommended using comparison websites to help understand differences in policies.

“The number one way to save money on home insurance is to shop around,” Mr Bird said.

“Regardless of whether you’ve had a large premium increase or not, you can save a lot of money if you get a couple of quotes from alternative insurers,” he said.

MyBudget director Tammy Barton said people often stuck with the same insurance provider for decades because of convenience and complacency.

“Life is busy and we are all time poor,” she said.

But comparing the market and shopping around could potentially save people hundreds or thousands of dollars, Ms Barton said.

“You don’t necessarily have to change insurers when you shop around,” she said.

“Quite often your current insurer will price match a competitor’s quote – saving you money while still being a loyal customer.

“You need to be careful though and compare apples with apples. Ensure your new policy covers everything you are currently insured for.”

Ms Barton said consumers could also save money by checking whether insurers offered discounts if they bundled home and car policies together, paying annually instead of monthly to get a discount and choosing a higher excess.