Understanding your Allianz Home Insurance premium

Last updated on April 16, 2024
Your home insurance premium is likely to change each year and you may wonder why. As a trusted insurer, we want to help you understand your premium. This guide gives you the facts: how your premium works, how we calculate it, and why it can change.
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The money you pay us to insure your property is called a premium. By paying your premium, you’re contributing towards a shared pool of funds that helps to pay claims. It’s also used for expenses - such as staff, office space and other things that keep our business going.

We consider each policyholder’s circumstances to determine their likelihood of making a claim. That’s how we make sure each policyholder’s premium makes a fair contribution to the shared pool of funds.

We’ll base your premium on your circumstances, the cover you’ve chosen, your likelihood of making a claim, and the potential cost of the claim. That’s how we make sure each policyholder’s premium reflects what we believe is the likelihood to make a claim. To work out how much it will cost to provide insurance for your home or contents, or both, we use various data sources. We’ll also ask you specific questions. Your answers are important, and all our customers have a duty to not make a misrepresentation.

To calculate your premium, we use a number of risk factors. Some of the key risk factors to determine your likelihood of making a claim include:

The address of your house plays a significant role in shaping home insurance premiums. We consider a number of potential risks and extreme weather events such as cyclones, floods, or bushfires.
Occupancy is another key piece of information for home insurance. Different occupancy types, such as owner occupiers, landlords or renters, carry different levels of cover, risk and potential claims.
Our claims statistics show that home insurance customers who have had a claim are more likely to have another claim at some stage.
The potential risk of a claim increases as a building gets older. As these older buildings are more susceptible to structural, electrical, and plumbing issues, this is reflected in premiums of some homes. This is only a rating factor for home insurance buildings cover. 
The materials used to build your home can impact the risk profile of the property. For example, they can indicate fire risk and how much it would cost to replace.
Your sum insured is the most we’ll pay if you need to make a claim for an insured event, such as a fire1. We base your sum insured on your estimate of the cost to replace your home or contents, or both, depending on your policy.
Our claims experience shows that the age of the oldest policy holder influences the likelihood of a claim being made against the home insurance policy.

You can review your sum insured by using Home Insurance calculators or Landlord Insurance calculators.

Remember, it’s important to give us accurate information about your property to make sure your insurance cover is appropriate for your home.

When you update your home insurance policy, your premium may change. For example, increasing your cover because you’ve purchased a new TV or listing expensive jewellery on your policy will usually increase your sum insured. 

Your sum insured is the maximum amount your policy will pay for a covered loss. When you increase this amount, your cover and premium also increase to reflect the higher level of cover.

Other factors beyond your control may also affect your home insurance premium including:

In recent years, Australia has experienced more frequent extreme weather events like bushfires, storms, cyclones, and floods, impacting many communities. This can lead to an increase in the costs of providing much needed support and claims services to our customers.

Living in an area that’s prone to flood, bushfires, or cyclones may result in higher insurance premiums. This is because the risk of these natural disasters is greater.
When building and construction costs increase due reasons such as supply chain disruptions, skilled labour shortages, or increases in cost of building materials, the cost of an average home insurance claim also increases. This can mean we have to charge more premium to ensure we can cover these claims costs.
We own more technology than ever before, such as smart watches, laptops and mobile phones. This means more opportunities for our expensive devices to get broken, lost or stolen. Repair or replacement costs can be expensive, which impacts the cost of contents insurance claims.
Outine of a storm cloud
To learn what to do before, during and after an extreme weather event, go to our extreme weather support page.
72-hour exclusion period may apply – Home
We don’t provide cover for any loss of or damage to your property caused by cyclone, flood, grassfires, and bushfires, during the first 72 hours after you first purchase a policy or increase your cover under an existing policy. For full details of conditions and exclusions please refer to the relevant PDS.

This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 ("Allianz"). In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way.

Any opinions expressed constitute our views as of April 2024 and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.

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.