How Much Does Home Insurance Cost?

Back to top

Is home insurance worth it?

How much will home insurance cost me?

What determines home insurance costs?

Why has the cost of home insurance risen?

What happens if I’m underinsured?

How can I keep my home insurance costs low?

Where can I compare home insurance policies?

Long story short

Average home insurance costs have been revealed

iSelect customers spent an average of $1,607 annually on combined home and contents insurance in 2023-24.

Home insurance premiums have increased

The 14% rise in 2024 is linked to inflation, natural disasters, and rising repair costs.

Various factors impact your premium

Location, security features, and claim history all affect your home insurance costs.

There are ways to lower your premiums

Increase your excess, improve home security, and compare policies for better savings.

Is home insurance worth it?

Home insurance is a safety net for what might well be your most important asset – your home and its contents.  

Many see home insurance as a single product, but it’s actually more versatile. It can cover your home, its contents, or both. Whether you’re a homeowner, landlord, or renter, it can help lighten the financial load of repairing or rebuilding your home and its contents are damaged or destroyed by an ‘insured event’.  

So, what on earth is an insured event? Many policies will cover damage from storms, fires, vandalism, earthquakes, lightning and explosions. But it really depends on the terms of your specific policy, and you wouldn’t want to assume anything as a given.  

It’s worth giving the product disclosure statement (PDS) – usually found on the insurer’s website – a quick read beforehand. It goes into detail about every event that’s covered (and just as importantly, not covered). 

While home insurance isn’t mandatory, having it can help you sleep peacefully at night knowing your home and everything you own (and worked so hard for) are protected. And that peace of mind alone can be worth its weight in gold!

How much will home insurance cost me?

In 2023-24, iSelect customers spent an average of $1,339 per year on building insurance. People who took out just contents insurance spent an annual average of $448, and people taking out combined home and contents insurance spent $1,607 for the year.

Of course, the exact amount will depend on specific factors about your home and level of coverage. 

What determines home insurance costs?

The cost of your home insurance premium depends on various factors, including the following:

Location

Areas with a history of highly destructive weather are a lot riskier to insure. What insurers look at in Queensland could be pretty different to what Victorian homeowners deal with due to the different risks in each state – cyclones up north and bushfires down south.

Combined vs. standalone policy

Getting a combined home and contents insurance policy might be more expensive compared to a standalone building or contents insurance, but it could save you a lot of hassle if disaster unfortunately strikes.

Value of your contents

How much your contents insurance costs could be totally different to your mate who’s living the minimalist life – especially if you’ve got a pricey Fender and a surfboard in the mix!

Optional cover

Some home insurance policies offer protection against things like accidental damage, portable cover, or defaulting tenants as optional extras. Just be aware – these optional extras will usually raise the cost of your premiums.

Security features

Having an alarm system, deadlocked doors, security doors and key lock windows can all help to keep your place safe, and therefore can often lower the price of your premiums.

Age and features of the home

A new, well-maintained home might cost less to insure than an older home. At the same time, the materials used to build the house can also affect the premium.

Claim history

If you’ve made claims on home insurance before, you might need to pay a higher premium than someone who has a clean claim history. Some insurers have no-claim discounts as a reward to those who haven’t made a claim for a period, usually five years.

Why has the cost of home insurance risen?

If you feel a bit of a sting to the wallet paying your home insurance premiums, you’re not imagining it. The cost of home insurance went up by 14% in 2024 (higher than any other products and services).¹ABC News – Home insurance premiums under spotlight as customers fight to overturn massive increases

As you might already suspect, inflation was the main culprit. The overall cost of living is on the rise, and insurance premiums aren’t immune to it.  

The insurance industry also reckons the rising cost of premiums is due to natural disasters and higher repair costs.   

Mother Nature can have a flair for drama, no matter where you live in Australia (exactly why there are many reasons why home insurance could be a good idea in your state!) Devastating floods, raging bushfires, and even earthquakes have led to massive insurance payouts. When insurance companies cover big claims after disasters, they sometimes need to adjust premiums so they have sufficient funds to handle future claims.  

Rising construction costs, largely driven by shortages in materials and labour, have pushed up the price of repairs. That also affects how much it costs to insure your property. Again, this has a knock-on effect: Insurers have to raise their premiums to cover the increased cost of repairs and rebuilding.

Helpful tip

Feeling the pinch? You don’t have to ditch your insurance just to save some cash. You can always check your policy and see if there’s anything you’re paying for but no longer need – maybe you no longer need portable contents cover as your backpacking days are now behind you. 

Take a few minutes to compare policies online – different insurers can have wildly different rates for similar cover.

Adrian Bennett

General Manager for General Insurance

What happens if I’m underinsured?

Underinsurance is all too common in Australia. It happens when you don’t take out a big enough insurance sum to cover your home for the full cost of rebuilding and replacing your prized possessions. 

If you’re underinsured, you might have to pay a significant amount of the repair and replacement costs from your own pocket – even if your home insurance claim is successful. Imagine dealing with a leaky roof and racking your brain trying to find extra money for the roofer – a double whammy that could’ve been easily avoided. 

Avoiding underinsurance can be easier said than done. But instead of guesstimating, there are ways you can get a dollar figure that’s more accurate of your property and belongings: 

1. You can use online tools and calculators that lets you input parameters describing your property. These can help give you a solid ballpark figure for the cost to rebuild your home or replace your valuables.
2. If you’re trying to get an estimated rebuilding cost, you can ask a local builder, architect, or quantity surveyor for the average building rates in your area. 
3. If you’re trying to come up with the most accurate value of your belongings, then you can go to each room of the house and do an inventory of all the stuff you want to cover. Sounds tedious, right? But if it’s something you only need to do once a year, you might as well hit two birds with one stone and tackle it while tidying up the whole house. 

Now, if you’re looking at a sum-insured policy, it could be safer to ask for what’s called a sum-insured ‘safeguard’ or ‘safety net’.²For more information, see Moneysmart – Choosing home insurance This gives you something of a safety net in the event of a total loss; the insurer usually adds a percentage of the total sum insured to your claim amount, so you get a little bit of extra cover.

How can I keep my home insurance costs low?

Fortunately, there are a few things you can do to reduce the cost of your home insurance premiums. For example, you could:

Keep your home secured

A home with a bit of added security can attract lower premiums. Installing security screens, alarms and deadlocks for your doors and windows can go a long way here. So, let your insurer know about your security setup and see whether it can shave a bit off the costs!

Pick a higher excess

This one’s a bit of a trade-off. An excess is the amount you agree to pay whenever you make a claim, and choosing a higher excess might also mean lower premiums. You’re basically choosing to pay a bit more at claim time to pay a bit less on your regular premiums.

Compare policies

Don’t simply auto renewal. There are plenty of different insurers competing for your business – and some will offer cheaper policies than others. Of course, you should also make sure that you’re getting adequate coverage, but comparing policies can still be a great way to find the best fit for your needs and your budget.

Where can I compare home insurance policies?

Instead of looking up every insurer and drawing up a list of the different policies they offer, there’s an easier way to compare home and contents insurance.  

With iSelect, you can explore policies in a few clicks. The different premiums and features of each policy are placed side by side so that you can weigh them up at a glance. So give it a whirl and take the stress out of finding home insurance.