The Actuaries Institute reports that median home insurance premiums have escalated to $1,894 annually as of March 31, 2025. Properties in high-risk areas, particularly those susceptible to flooding and cyclones, have experienced even steeper hikes, with premiums rising by up to 50%.
Consequently, approximately 12% of Australian households now allocate more than one month's gross annual income to home insurance, categorizing them under 'insurance affordability stress.' This equates to about 1.24 million households facing financial strain due to escalating insurance costs.
Several factors contribute to this upward trend. The increasing frequency and severity of natural disasters have led to higher claims, prompting insurers to adjust premiums accordingly. Additionally, inflation and rising construction costs have further influenced the insurance market.
For real estate professionals, these developments underscore the importance of advising clients on comprehensive risk management strategies. Encouraging homeowners to assess their insurance coverage regularly and explore options to mitigate premium increases is crucial. This may include implementing property improvements to reduce risk or shopping around for competitive insurance rates.
Staying informed about industry trends and regulatory changes is essential for real estate agents to provide valuable guidance to clients navigating the complexities of the current insurance landscape.
