How to Reduce your Home Insurance Premiums

Allianz Home Insurance

Your home is one of the biggest investments you'll ever purchase. You worked hard and saved for the deposit, and the mortgage payments eat up a large portion of your take home pay. Some people just miss out on little luxuries, while others do it real tough. Insurance is an essential part of protecting your asset, but there are ways you may be able to reduce your home insurance premiums and perhaps have a bit of spare cash at the end of the pay week.

Reduce Home Insurance Premiums
Increasing your Excess

An excess is the amount you need to pay when you want to make a claim. You might be paying $100 a month for insurance, for example, when your home is damaged in a fire. It is estimated to cost $10,000 to make the necessary repairs. You might need to pay $500 towards this claim - that is an excess (it is usually taken from the payout amount). However, if you want to reduce your premium from $100 a month to $75 a month, you might be able to increase your excess to $1,000. It varies from insurer to insurer. It could mean that you're less likely to make claims for small amounts1. There's little point making a claim to replace a $300 window if the excess is $800 (you'll need to pay $800 to get $300 back).

Estimate the value of contents accurately

Try to make an accurate estimate of the replacement cost of your household contents; you may want to use our home contents insurance calculator to assist you with calculating your estimate. If you have to make a claim for your contents, Allianz will either offer to replace the item or offer you a cash settlement to the value that it would reasonably cost to replace the item yourself, so it’s important to make sure that you’ve insured your contents to the right amount.

Over-estimating will mean that you pay a higher premium for the same outcome at claim time and underestimating will mean that the item may not be able to be replaced for the amount it was insured under.

Installing alarms

Home security is essential for many reasons - it can prevent an unwanted visitor from making off with your belongings, for one - but it can also mean reduced premiums as your insurer will see your home as being less at risk of a break in, and you at less risk of making a claim. Installing security measures such as alarms, additional locks and deadlocks and lockable bolts on your windows will mean you pay less. It'll also mean your home and family are safer.

Consider the area you're buying into

When your researching where to buy a home some of the considerations you need to think about are:

These are some of the factors that insurers use to calculate your premium, so it can be helpful for you to investigate what risks your potential new home or neighbourhood might be subject to1.

Pay Annually

Paying your insurance premiums yearly instead of monthly may reduce them. Of course, you need the lump sum up front, but over the year it can work out to be substantially less. Make the calculations and see how much you can save by paying annually.

Choose your cover wisely

If you live on the side of a mountain, the chances of being flooded by rising rivers are slim (but not completely absent). Weigh up whether certain covers are essential for your circumstances. If you don't need earthquake cover, don't take it - and your premiums will be less.

Claim History

Do you make a lot of claims? Perhaps you're just unlucky or clumsy. However, this can affect your premiums. An insurance company will take into account your claims history and if you've made many frivolous (or even major) claims this could increase your premiums, as an insurer will see you as a high risk of making more claims

There are many ways to reduce your insurance premiums. It pays to delve into the options available, and asking your insurer what they can do for you.

1 Seeto, T. 2021. How Much Does Home and Contents Insurance Cost? viewed 26 October 2021.

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 at the time of issue 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.