How one phone call could cut up to $1,172 from your insurance costs in minutes

Your home insurance renewal notice landed with a thud, and the figure on the page felt like a punch in the gut.

The surge in premiums left many retirees wondering how they could possibly keep up.

For Australians already stretched thin, the numbers only seemed to climb higher.

The rising cost of home insurance in 2025 was unlike anything households had seen before.

Average premiums jumped 16 per cent—an extra $359 a year—but some increases were far more brutal.

One Tasmanian homeowner saw their premium with Honey Insurance leap by 89 per cent despite having no history of disasters or claims.

Experts warned that the pain would not stop there, with both home and motor insurance tipped to rise by another 10 per cent on average this year as companies lifted profits beyond long-term averages.

Australians found themselves in the middle of a perfect storm.

Record-breaking floods in 2022 pushed insurance claims past $7 billion, driving up costs across the country—even in regions untouched by disasters.

The industry also moved into a ‘hard market’ cycle, where demand outpaced supply and premiums soared.

But perhaps the hardest blow was the so-called loyalty penalty.

Research revealed that existing customers often paid between 27 and 34 per cent more than new ones, amounting to $3.6 billion annually in what consumer advocates called ‘loyalty taxes’.

How switching can save you money

The good news was that switching providers could save households hundreds—sometimes thousands—each year.

Research showed that moving to a five-star policy delivered major savings, including $1,172 in the Northern Territory, $921 in Queensland, and $732 in New South Wales.

Even in Victoria and South Australia, where the savings were smaller, switching still cut more than $600 from annual costs.

CHOICE compared quotes from 35 insurers and found 19 of them raised premiums at nearly every address tested between January 2024 and January 2025.

Among the worst were Kogan, which lifted prices by nearly 38 per cent, RAC with 32.6 per cent, and Honey with 30.7 per cent.

By contrast, a handful of insurers showed restraint.

RACQ had no average increase, NRMA limited rises to 1.7 per cent, and CBA sat at 5.2 per cent.

Why older Australians feel the pressure

For older Australians, the process of comparing quotes often felt daunting.

Websites and digital tools could overwhelm, but there were ways around the barrier.

Calling insurers directly, asking family for help online, or using step-by-step comparison sites all made the task easier.

Premiums also varied dramatically depending on location.

In Sydney, homeowners in high-risk suburbs paid more than triple the premiums of those in safer areas.

Across greater Sydney, the average premium had climbed by 66 per cent since 2020.

Looking ahead

Experts advised that while premiums would not drop soon, households still had options.

Adjusting coverage, raising excess amounts, or installing security systems could reduce annual costs.

Long-term, choosing where to live with insurance costs in mind was becoming an increasingly important financial decision.

Regulators also had their eyes on the sector.

ASIC Commissioner Alan Kirkland stressed that insurers had to treat customers fairly, warning that they could not blame cost inflation for rises without reducing premiums when inflation cooled.

Despite the stakes, 88 per cent of Australians still renewed with the same insurer, often missing out on savings that could ease financial pressure.

While soaring home insurance premiums are hitting households hard, the pain isn’t limited to properties alone.

Drivers across the country are also facing steep hikes, with motor insurance costs climbing at a rate that’s leaving many questioning how to keep their vehicles on the road.

If you’re already struggling with rising household bills, this story offers another look at how essential cover is becoming harder to afford—and what that means for everyday budgets.

Have you recently switched insurers or been stung by a shocking premium hike…would you share your story to help others make smarter choices?