As we age, we look for stability and predictability, especially when it comes to finances.

Fixed incomes and careful budgeting are the norm for seniors across the country.

That's why a sudden spike in a supposedly regular expense could be a severe blow to our financial security.

This is a reality that Stephanie Henderson knows all too well.

In 2020, Stephanie paid $94 a month for her home and contents insurance.

Fast forward to the present, that figure has shockingly inflated to $600—almost a 600 per cent increase from the initial amount.

Home insurance policies have been rising over the years and could continue to rise in the foreseeable future. Image Credit: Pexels/Mikhail Nilov

For Stephanie and her husband, who are both pensioners, this could mean that half of their income should go to insurance and health fund costs.

'It's horrible,' Stephanie lamented. 'I'm pulling on savings just to pay bills.'

The Hendersons' story is not an isolated incident.

Home insurance premiums across Australia have been on the rise.

Research conducted by Canstar showed an average increase of 13 per cent over the last 12 months.

This increase could mean an additional $286 annually for many homeowners.

Some regions, like Queensland's northern area, are known for higher premiums, and South Australia has seen significant percentage spikes.

However, the Hendersons reside in Lansdowne, NSW, which is not considered a high-risk area.

Their three-bedroom home on a hectare of land is situated near a small creek and 20 km inland from the nearest beaches.

However, this proximity to water became a curse when Lansdowne experienced the east coast floods last March 2021.

Although the Henderson's home was spared, the aftermath made their insurance premiums soar.

The Henderson's home was affected by the East Coast floods back in 2021, which prompted insurance companies to hike coverage prices. Image Credit: Stephanie Henderson

Stephanie tried to look for a more affordable policy, but many insurance companies refused to cover their home.

'Half the insurance companies, if they hear the postcode 2430, they won't touch you,' Stephanie claimed.

'They would say, "We are not ensuring that postcode. End of statement."

According to another research by Monash University and AON Risk Services, about 370,000 homes in Australia are nearly uninsurable due to coastal flooding and erosion risks caused by climate change.

'Homeowners can still purchase insurance, and the insurance will cover them from claims, except those caused by actions of the sea' actuary and lead author of an Actuaries Institute's Home Insurance report Sharanjit Paddam stated.

'Consumers are now paying the cost of delayed action on climate change,' he added.

The Hendersons, like other homeowners, now face a tough decision: continue to dip into their savings to cover excessive insurance costs or go without insurance altogether.

So, what can you do if you find yourself in a similar situation? Here are some tips to help you navigate this challenging landscape:

• Shop around: Compare policies from different insurers to find the best coverage and rates according to your needs.
• Increase your excess: Opt for a higher excess to lower your premium. Just make sure it's an amount you can afford to pay if you need to make a claim.
• Review your policy: Regularly review your policy and check that you're not over-insured. Adjust your coverage accordingly.
• Ask for discounts: Some insurers offer discounts for loyalty, bundling policies, or having a good claims history.
• Consider your risks: If you live in a high-risk area, consider investing in preventative measures, such as flood barriers or fire-resistant materials.
• Seek professional advice: An insurance broker could help you find a policy that suits your specific needs. They could also have access to deals not available to the general public.
• Government assistance: In some cases, government programs could help offset the costs of insurance for those living in high-risk areas.

As the climate crisis intensifies and affects homes, insurance premiums could continue to rise.

Stay informed and proactive about your insurance policies and explore available options to ensure that your home and savings are protected.

Key Takeaways

• Stephanie Henderson's home and contents insurance premium has dramatically increased from $94 a month to $600 within four years.
• Canstar research indicated that home insurance premiums in Australia rose by an average of 13 per cent over the past year.
• The Hendersons' home was not affected by the 2021 East Coast floods, but their insurance premium increased significantly in the aftermath.
• Residents in high-risk areas now face higher premiums and insurance exclusions due to increased climate-related disasters.

Have you experienced a similar hike in your home insurance? Join in the conversation and share your experiences and thoughts about this in the comments section.

 

[maggiej]

Our insurance went up by approx $300 and we have had no claims in many years and do not live in any zone for bushfires and floods. I checked quite a number of companies and they were all about the same cost. We are with AAMI. I did consider not insuring but did not want to tempt fate

 

[Bridgit]

Climate crisis - what climate crisis?????We have 40 acres and in 25 years nothing has changed - the creeks flood, roads are cut, high rainfall at times, low rainfall at others - we sit here and watch it all go by and nothing is worse here now than 25 years ago!

 

[IAN3005]

I cancelled all my insurance...the only one I kept, downgraded, was the health insurance.

 

[Bridgit]

I cancelled all my insurance...the only one I kept, downgraded, was the health insurance.

Same here - never made a claim in 25 years.

 

[Isis]

It gets so scary, my payment was $79 per month then $179” no difference with other insurers.
Just not game to do without. But a lot of things coming off my shopping list. Maybe the powers that be think the latest pension rise will cover it?
No point anxting they really don’t care.

 

[[email protected].]

yes i can understand their dilemma my building insurance went up by 19.5%,from last year behind the 8 ball again yet i have never made a claim also other insurances have gone up too where will it end.

 

[Rosi Gordon]

The house insurance is based on replacing your house when the unthinkable happens. With the value of house prices raising at an alarming rate then it's only feasible that insurance will also rise. Can't expect to pay low insurance premiums for high value homes. I'm on the age pension and haven't had any ho.e insurance since retirement.

 

[midgemills]

I got my NRMA house and contents insurance invoice yesterday. I live in Forster about 50 minutes from Lansdowne NSW. Last year my annual insurance was $2205.32. This year is $2597.83. Almost $400 extra. I will be visiting my local NRMA office to try and tweak it to see if I can negotiate a better deal.

 

[Isis]

The house insurance is based on replacing your house when the unthinkable happens. With the value of house prices raising at an alarming rate then it's only feasible that insurance will also rise. Can't expect to pay low insurance premiums for high value homes. I'm on the age pension and haven't had any ho.e insurance since retirement.

You are very brave, I can’t take a chance to have to replace everything if the worst happens.
Quite a few home fires in the news lately

 

[IAN3005]

You are very brave, I can’t take a chance to have to replace everything if the worst happens.
Quite a few home fires in the news lately

Lucky that I own nothing... most of the 'STUFF' I've got came from the side of the road so let her burn.....

 

[Gsr]

After being with NRMA for most of our insurances for over 50 years in the last couple of years we have moved all of our cars and this year our house insurance to other companies. This year our house insurance went up dramatically, our loyalty discount dropped from 25% to 10%, but we were told that had no effect on the price rise, it was only a figure drop, not a discount drop. When asked why it was even on the policy if that was the case they couldn’t provide a satisfactory answer. Our multi policy discount also dropped since we had already insured our vehicles elsewhere. When I asked why we were paying flood and fire cover when we will never flood, and very unlikely we will ever have a fire I was told we could drop that off our policy, funny that every year up til now when I have asked to drop it we have been told we couldn’t as every policy has it. By then I had found a cheaper policy so we changed anyway. Unfortunately those of us who choose to be insured are still copping the emergency services levy the NSW government stated last November would come off insurance policies and be added onto council rates so everyone who owns a house pays it and not just the people who are insured. As per usual it was all a big fat lie from the government, after all how hard is it to add the levy onto the council rates when they were issued in early July, then make the insurance companies refund people who had paid it for this financial year already. I know it is not a huge amount but the cost should be shared by everyone who owns a house, regardless of whether they choose to insure it or not. Just look how quickly uninsured people put their hand out for taxpayer funded help when their houses are damaged by fire or flood. From my point of view if you aren’t insured too bad, how sad, you pay the consequences. I also believe insurance companies should have a legal responsibility to insure homes even when they are in flood and fire risk areas, and to not charge exorbitant amounts to insure them. They make enough from the insurance paid by people who never claim to cover the ones who do.

 

[Phantom55]

I got my NRMA house and contents insurance invoice yesterday. I live in Forster about 50 minutes from Lansdowne NSW. Last year my annual insurance was $2205.32. This year is $2597.83. Almost $400 extra. I will be visiting my local NRMA office to try and tweak it to see if I can negotiate a better deal.

try changing ins companies...I do it every year....it works .they offer non customers great deals to get them ,and the next year they up the premium .....it works! regular customers were once given good deals in the old days...the old days are gone, the best & most sought after customer is the one they dont have...change every year!!!

 

[Phantom55]

The house insurance is based on replacing your house when the unthinkable happens. With the value of house prices raising at an alarming rate then it's only feasible that insurance will also rise. Can't expect to pay low insurance premiums for high value homes. I'm on the age pension and haven't had any ho.e insurance since retirement.

ins should not include the land( land ins could be offered as an extra if so desired) but many million dollar homes are sitting on a half million dollar block of land and not a real lot happens to land, even in the worst storms and bushfires the land is pretty stable and naturally re greens

 

[Phantom55]

ins should not include the land( land ins could be offered as an extra if so desired) but many million dollar homes are sitting on a half million dollar block of land and not a real lot happens to land, even in the worst storms and bushfires the land is pretty stable and naturally re greens