Victorian Insurance Premiums Spike Amidst Industry Turbulence
Victorian Insurance Premiums Spike Amidst Industry Turbulence
Michael Keynes, a spokesperson for VMIA, stated that the raises, which see premiums leaping by an average of 53%, are a necessary measure to accommodate the recent flood of claims. "A record number of domestic building insurance claims have been resolved over the past year." Since July 1, the insurer has settled over 4000 claims.
Specifically, premiums for new single and multi-unit constructions will surge by 65%, while structural and non-structural renovations along with swimming pools will face a 20% rise. The charges for owner-builders are also set to increase by 65%.
Keynes attributes this spike to several intersecting issues: "We are dealing with the compounded effects of builder insolvencies, high inflation, and an ongoing shortage of skilled workers, all of which drive up building costs. As a result, VMIA needs to adjust premiums to ensure continued protection for homeowners when builders can't complete or rectify constructions."
In response, industry watchdogs, such as the Housing Industry Association (HIA), have been vocal about their objections. Keith Ryan, the executive director of HIA Victoria, warned that these increased premiums will further dent housing affordability in the state. "Victorian home builders and their clients are already grappling with soaring costs. This increase is an additional burden which hits new homebuyers the hardest," Ryan said in a statement.
The new premiums add to the already heavy financial load confronting new home buyers. "In Melbourne, nearly half of the cost of a new house and land package is swallowed up by taxes, fees, and related charges – effectively putting homeownership out of reach for many Victorians," Ryan elaborated.
Ryan also expressed disappointment that higher premiums were not coupled with enhanced insurance benefits for homeowners. He cautioned that builders, already stretched by increased material and labor costs, will ultimately pass these added expenses on to customers.
While premium hikes are aimed at safeguarding homeowners in these turbulent times, it’s clear that the cascading costs and their effects on housing affordability will spark further debate. This article incorporates information originally reported by insuranceNEWS.com.au.
Published:Monday, 17th Jun 2024
Source: Paige Estritori
Share this news item:
| New Legislation Prohibits Life Insurers from Using Genetic Test Results 08 Mar 2026: Paige Estritori The Australian government has enacted legislation prohibiting life insurers from using the results of genetic tests to refuse coverage or increase premiums. This landmark decision aims to eliminate genetic discrimination and encourage individuals to undergo potentially life-saving genetic testing without fear of financial repercussions. - read more |
| Australian Insurers Face Challenges in Cyber and AI Risk Readiness 08 Mar 2026: Paige Estritori Recent findings from the PwC Insurance Banana Skins Survey have raised concerns about the preparedness of Australian insurers in managing emerging risks, particularly those associated with cyber threats and artificial intelligence (AI). The survey, which gathered insights from 698 insurance executives across 42 territories, including 37 from Australia, indicates that Australian insurers scored 6.6% lower on the Preparedness Index compared to their global counterparts. - read more |
| Rising Insurance Premiums Pose Challenges for Australian Businesses 08 Mar 2026: Paige Estritori Businesses across New South Wales are grappling with substantial increases in insurance premiums, prompting calls for urgent reforms to alleviate financial pressures. According to Business NSW's latest Business Conditions Survey, nearly 80% of businesses have experienced double-digit hikes in insurance costs over the past year, with one in three reporting increases of 30% or more. These surges significantly outpace the annual inflation rate of 2.5%, placing an undue burden on the business community. - read more |
| Impact of Victorian Bushfires on Home Insurance Costs 08 Mar 2026: Paige Estritori Recent bushfires in Victoria have caused significant devastation, leading to concerns about rising insurance premiums for homeowners in affected areas. The Insurance Council of Australia (ICA) has declared the fires a catastrophic event, with over 2,600 claims already lodged. This situation underscores the financial challenges faced by residents in regions prone to natural disasters. - read more |
| DIY Review Checklist for your Income Protection Insurance If you have an income protection insurance plan already - or are thinking about buying one, then you need to be aware that these policies require regular maintenance and careful scrutiny to ensure that they adequately meet your needs. Unfortunately, many people purchase income protection insurance policies only to find out about their shortcomings at claim time. - read more
|
| The Myth of Unaffordability: How to Find Value in Income Insurance Policies Income protection insurance is often surrounded by the myth of being unaffordable, deterring many Australians from safeguarding their most valuable asset—their ability to earn. This introduction aims to address this misconception head on, revealing the real value that income insurance policies can provide. It is crucial to understand that the cost of such a policy pales in comparison to the potential financial hardship faced without one. - read more
|
| Understanding Income Protection: How Much Insurance Do You Really Need? Income protection insurance is a type of policy designed to provide you with a safety net in case you’re unable to work due to illness or injury. The concept hinges on securing a portion of your earned income when adverse health conditions impede your ability to generate revenue through your profession. This protection becomes a financial bulwark, ensuring that despite unforeseen health challenges, your livelihood is safeguarded and your lifestyle can be maintained as closely as possible to your current standard. - read more
|
| Life After You: Planning Ahead With Quality Life Insurance for Your Family Life insurance is a fundamental component of a robust financial plan, yet its significance is often underestimated. It serves as a safety net, ensuring that your loved ones are financially secure in the event of your absence. Understanding life insurance is the first step towards safeguarding your family’s future. - read more
|
A provision in a life insurance policy that prevents the insurer from voiding coverage due to a misstatement by the insured after a certain period.