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Understanding insurance premiums

Have you ever wondered what’s included in the amount you pay for your insurance? We want to help you understand your Allianz insurance premium, what it consists of, and the factors that can influence it.

Your premium is the amount you pay for your insurance policy. Each premium consists of our base premium and mandatory government charges.

Our base premium is the starting point for calculating your premium. We work this out by deciding your likelihood of making a claim and its potential cost. It also includes any optional covers you add to your policy, like Portable Contents, and any adjustments or discounts you may qualify for.

Here’s a breakdown of the types of costs that may make up your premium:
Insurance companies also need to purchase their own insurance, known as reinsurance. Specialist insurance companies provide reinsurance to help us pay for claims caused by major disasters such as bushfires.
Councils and insurers in NSW must pay the Emergency Services Levy (ESL), also called the Fire Services Levy (FSL), each year. We pay this levy to state governments to help fund the emergency services.
The Australian government applies this federal tax to most goods and services, including insurance.
Stamp duty is a tax charged by state governments on certain transactions, like buying a house or a car. It’s also known as transfer duty and varies from state to state.
Choose your insurance type and find out how we work out your premium and why it can change.
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Your premium is the amount you pay for your Allianz Insurance policy. It’s paid into a shared pool of funds that’s used to pay claims and expenses to run our business. To determine a premium, we consider certain factors relating to each policy holders' circumstances and their likelihood of making a claim.
All insurers have a base premium. It’s the starting point that helps us determine the cost of insurance coverage for our policyholders.

The law requires us to include these charges to fund various government initiatives. We forward these costs to the necessary government organizations. Here are some examples:

  • In NSW, the emergency services levy (ESL) or fire services levy (FSL) supports the essential work of the emergency services.
  • Goods and services tax (GST), a federal tax that’s applied to most goods and services including insurance.
  • Stamp duty, also known as transfer duty, is charged on certain transactions, like buying a car or a house, or on insurance.

Reinsurance is specialist insurance for insurers to help cover the cost of claims for major disasters like bushfires or floods.

By transferring a portion of our risk to a reinsurer, we can manage risk more effectively. It means we can offer more comprehensive coverage knowing we have their financial backing. In fact, insurance regulators require us to maintain a certain level of reinsurance cover.

Reinsurance works in the same way as your car or home insurance. The number of claims paid by the reinsurer impacts the premium we pay for our policy.

Unfortunately, Australia has experienced a number of natural disasters over the past few years. This has caused reinsurance costs to go up.

There are a number of risk factors that influence your premium. If we believe your risk of making a claim is high, your premium is likely to be higher than someone with less risk. As everyone's level of risk is different, each insurance premium can be different. As an insurer, we need to balance the risk involved in providing cover for each policy holder or situation.
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Allianz acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Custodians of the lands on which we live and work across Australia. We pay our respect to First Nations Elders past and present.

Any advice here does not take into account your individual objectives, financial situation or needs. Terms, conditions, limits, and exclusions apply. Before making a decision about this insurance, consider the relevant Product Disclosure Statement (PDS)/Policy Wording and Supplementary PDS (if applicable). Where applicable, the PDS/Policy Wording, Supplementary PDS and Target Market Determination (TMD) for this insurance are available on this website. We do not provide any form of advice if you call us to enquire about or purchase a product.

Allianz Australia Insurance Limited ABN 15 000 122 850 AFS Licence No. 234708 is the insurer of any general insurance products offered, and Allianz Australia Life Insurance Limited ABN 27 076 033 782 AFS Licence No. 296559 is the insurer of any life insurance products offered. Each entity is responsible for any statements and representations made about its products, on this website.