Your home is one of the biggest purchases you may ever make. You worked hard and saved for the deposit, and now the mortgage payments eat up a large portion of your take home pay. Some people may miss out on little luxuries, while others do it real tough.

Home Insurance is an essential part of covering your asset, but there are ways you may be able to reduce your home insurance premiums so that you have extra cash at the end of the pay week.

Your excess is the amount you need to pay when you want to make a claim. For example, you might be paying $100 a month for home insurance and when your home is damaged in a fire, it is estimated to cost $10,000 to make the necessary repairs. According to your policy, 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 monthly $100 premium, you might be able to increase your excess. Whether you can increase your excess and the amount it may save you varies from insurer to insurer. It could also mean that you're less likely to make claims for small amounts. 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). Before making a decision, consider the benefits and costs of increasing your excess to reduce your premium.

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 a policy with Allianz and make a claim for your contents, depending on your cover, we’ll 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. That’s why 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.

Home security is essential for many reasons, most importantly it can prevent an unwanted visitor from making off with your belongings. It can also mean reduced insurance premiums as your insurer may 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 certain alarms, may help you decrease your insurance premium as well as keep your home secure and family feeling safer.

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

  • Is there are a risk of flood or bushfires?
  • What are the crime rates in the area?
  • Is there a risk of earthquakes (however remote)?

These are some of the factors that insurers use to calculate your insurance premium, so it can be helpful for you to investigate what risks your potential new home or neighbourhood might be subject to. Canstar has calculated the average home insurance premium costs across Australia by state.

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. 

Do you make a lot of claims? Perhaps you're just unlucky or clumsy. Either way, this can affect your premiums as insurance companies will take into account your claims history. If you've made many smaller (or even major) claims, this could increase your premiums, as an insurer may 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 to ask your insurer what they can do for you.

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.

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.