Loyalty costs Australians in insurance premiums

1 in 3 who expressed satisfaction with providers rarely or never compare policies.

Whilst 43% of Australians report satisfaction with their current insurance provider, many may miss out on significant savings by not comparing alternatives. 

The “Policy Paradox" amongst Australian policyholders was based on 162,088 quotes and feedback from 1,265 Australians, found that loyalty to insurers could lead to avoidable costs.

According to Rachel Wastell, Mozo’s personal finance expert, the report showed a $574.20 (A$870) annual difference in premiums among top-value insurers. 

Yet, 1 in 3 policyholders who express satisfaction with their provider rarely or never compare policies, indicating missed opportunities for better value.

Rising premiums are another factor, with the average cost for home and contents insurance increasing by $190.08 (A$288) over the past year to a national average of $2,309.34 (A$3,499).

State data revealed significant variations in premium costs: South Australia has the lowest average premium at $1,354.98 (A$2,053), followed by Western Australia at $1,597.86 (A$2,421). 

By contrast, Queensland and the Northern Territory, which are more exposed to natural disasters, face the highest average premiums of $2,902.68 (A$4,398) and $3,000.22 (A$4,547), respectively.

Other factors influencing premiums include property construction type and value; for instance, concrete homes have the highest average premiums at $2,973.96 (A$4,506), whilst double brick homes average $1,935.12 (A$2,932). 

Homes valued above $528,000 (A$800,000) tend to incur premiums over $3,168.00 (A$4,800).

Barriers to switching providers include perceived complexity, distrust of new insurers, and concerns about reduced coverage. 

Wastell emphasised that many insurers now offer easier switching processes and sign-up discounts, encouraging consumers to review options regularly to potentially realise substantial savings.

($1.00 = A$1.53)