Australia’s home insurance premiums surge 28% in Q1 – Report

This strain affects 1.24 million Australian households.

Home insurance premiums surged by 28% to $1,894 within the year leading up to 31 March, according to a report by Actuaries Institute.

Properties facing higher risks, like those in flood-prone regions, saw a steeper increase of 50%.

The percentage of households experiencing "affordability stress" climbed from 10% to 12%, with these households spending an average of 8.8 weeks' worth of income on home insurance. 

This strain affects 1.24 million Australian households.

The issue of home insurance affordability is notably impacted by flood risks, particularly riverine floods.

For 171,000 households across Australia, over half of their insurance premiums are due to riverine flood risk. 

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If fully insured, these households would collectively pay an annual flood premium of $1.5b, averaging $8,800 per household. 

This signifies the extent of the current challenge.

While various initiatives are in progress, additional actions are necessary. The Institute advocates for a mix of short, medium, and long-term policies to alleviate affordability stress. 

These include risk reduction measures, revisiting insurance-related taxes or targeted subsidies, and potentially introducing interim cost-sharing approaches such as insurance or reinsurance pools, should policymakers deem expedited relief necessary.