How to Reduce Your Home and Contents Insurance Cost in Australia

Home and contents insurance premiums have risen sharply in Australia, driven by increasing extreme weather events, rising rebuild costs and reinsurance pressures. According to CHOICE research using quotes collected in January 2026, average annual premiums for combined home and contents policies now sit at:

State/Region	Average Annual Premium
ACT	$2,903
Victoria	$3,033
Tasmania	$2,964
Western Australia	$2,590
South Australia	$2,318
South Queensland	$4,711
North Queensland	$5,074
NSW	$4,852
NT	$4,914

The gap between the cheapest and most expensive policies for the same property can be $1,500–$4,400 per year depending on your state — which means shopping around is one of the most impactful financial decisions a homeowner can make.

1. Compare Every Single Year — The Loyalty Penalty Is Real

Insurance companies consistently offer better rates to new customers than to renewing ones. CHOICE research confirms that staying with your existing insurer without checking the market often costs hundreds of dollars more per year than switching. The strategy:

1. When your renewal arrives, don't auto-renew.
2. Get quotes from at least three competitors — Finder, Canstar and iSelect all offer free comparison tools.
3. If a competitor is cheaper for equivalent cover, call your insurer and tell them. Ask them to match it — retention teams often can.
4. If they won't match it, switch. It takes 15 minutes online.

New customer discounts of 15–30% are common across major Australian insurers including Budget Direct, Allianz, NRMA and Suncorp. Always buy online — most insurers' online discounts are 10–30% cheaper than calling.

2. Best Value Insurers in Australia (2026)

Based on independent research from Finder and CHOICE as of 2026:

• Budget Direct: Winner of Finder's Insurer of the Year 2026 and Best Value Home Insurance. Consistently among the cheapest for comprehensive cover. Save 30% on your first year's combined policy bought online. Note: not available in NT, North Queensland and some Northern WA postcodes.
• Allianz: Canstar Outstanding Value winner two years running. 2026 Finder Comprehensive Home Insurance winner. Strong flood cover options. Save up to 10% combining building and contents.
• NRMA: Top-rated for customer satisfaction. Strong in NSW. Competitive for properties in bushfire-prone areas.
• Honey Insurance: Offers a smart home sensor kit with policies — innovative approach to risk reduction and claims prevention.
• Qantas Home Insurance: Competitive pricing plus Qantas Points earn (up to 40,000 points for joining by 27 May 2026). Good option for frequent flyers.

State-based mutual insurers (RACV in Victoria, RACQ in Queensland, RAA in SA, RAC in WA) often perform well for customer satisfaction, though they're not always the cheapest on price.

3. Increase Your Excess to Reduce Your Premium

Your excess is the amount you pay out of pocket on a claim. CHOICE research shows that increasing your excess from $500 to $1,000 typically reduces annual premiums by around 10% per $500 increase. On a $3,000 annual premium, that's a $300 saving for a $500 excess increase.

This trade-off makes financial sense if:

• You have savings to cover the higher excess in the event of a claim
• You're a careful homeowner with a low claims history
• The premium saving exceeds the increased excess within 2–3 years

A $1,000–$1,500 excess is often the sweet spot between meaningful premium reduction and manageable out-of-pocket risk.

4. Pay Annually, Not Monthly

Paying monthly via instalments typically adds 10–25% to your annual premium through instalment fees and interest. On a $2,500 annual premium, that's $250–$625 extra per year. Pay the full annual amount upfront and the saving is immediate.

5. Bundle Building and Contents Insurance

Most insurers offer 10–15% discounts for combining building and contents under a single policy. If you're currently running them separately with different insurers, consolidating can reduce total costs — but only if the bundled insurer's pricing is competitive on both components. Always compare the bundle price against the sum of two separate best-price policies.

6. Review Your Sum Insured Carefully

Your "sum insured" is what you tell the insurer it would cost to completely rebuild your home. Being underinsured is a serious financial risk — if your home is destroyed and you're underinsured, you bear the shortfall. Being significantly overinsured means you're paying for coverage you'll never receive.

Use your insurer's online rebuild cost calculator or a quantity surveyor to get an accurate figure. Rebuild costs have risen 20–40% in Australia since 2020 due to construction cost inflation — if you haven't reviewed your sum insured recently, you may be underinsured without realising it.

7. Security Improvements Reduce Premiums

Insurers reward reduced risk with lower premiums. Common security improvements that attract discounts:

• Monitored alarm system: Can reduce contents premiums by up to 25% (RAC example). A monitored alarm typically costs $30–$60/month — potentially worthwhile if the premium saving exceeds the monitoring cost.
• Deadbolts on all external doors: Minor discount, free to add during a locksmith visit.
• Security screens on windows: Modest discount on contents cover.

Always declare security improvements to your insurer — they don't automatically update your policy when you improve your home's security.

8. Renters: Contents Insurance Is Worth It

Renters don't need building insurance (that's the landlord's responsibility), but contents insurance is strongly recommended. The cost of replacing everything you own — furniture, electronics, clothing, appliances — typically exceeds $20,000–$50,000. Contents-only policies start from around $200–$500/year for renters in low-risk areas.

Key things renters' contents insurance covers that many people overlook: theft, fire, water damage from burst pipes, accidental breakage (with optional cover), and liability if a visitor is injured in your home.

9. Check for Cashback on New Policies

When switching to a new insurer, check TopCashback Australia before signing up. Insurance sign-up cashback bonuses are regularly available, effectively providing an additional $30–$100 discount on top of any new customer deal.

What You Can Realistically Save

• Switching insurers annually: $300–$1,500/year (biggest single saving)
• Buying online vs over phone: 10–30% saving
• Increasing excess by $500: ~$150–$300/year
• Paying annually: $250–$600/year
• Bundling building and contents: 10–15% saving

An active approach to home insurance comparison can genuinely save $500–$2,000 per year for most Australian homeowners — making it one of the highest-return financial tasks you can do annually.