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Your home is one of the biggest investments you'll ever purchase. 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 protecting 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.

 

1. Increase your excess

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, 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 premium from $100 a month to $75 a month, you might be able to increase your excess. Whether you can increase your excess and the amount 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).

2. 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 a policy with Allianz and make a claim for your contents, 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.

3. Install alarms
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 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 a lower insurance premium. It'll also mean your home and family are safer.
4. Consider the area you're buying into

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.

5. Pay annually
Paying your home insurance premiums annually 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.
6. 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.
7. Claim history

Do you make a lot of claims? Perhaps you're just unlucky or clumsy. However, this can affect your premiums as insurance companies will take into account your claims history. If you've made many frivolous (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.

Disclaimer

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.

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, please 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.

Allianz Australia Insurance Limited ABN 15 000 122 850 AFS Licence No. 234708 is the insurer of any general insurance products offered on this website.

Allianz Australia Life Insurance Limited ABN 27 076 033 782 AFS Licence No. 296559 is the insurer of any life insurance products offered on this website.