Economy

Report on best home insurance deals shows Sydney residents are getting slugged

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A survey of Australia’s best home and contents insurance deals shows that Sydney residents pay 26% more than Melbourne residents to insure a home worth $250,000 and 48% more than Hobart residents.

A survey of Australia’s best home and contents insurance deals shows that Sydney residents pay 26% more than Melbourne residents to insure a home worth $250,000 and 48% more than Hobart residents.

The survey, conducted by financial services firm Cannex, is the first of its kind in Australia. The research company obtained more than 9000 individial quotes from around Australia and compared the major providers’ rates on home insurance, contents insurance and home and contents packages.

For home and contents packages, Sydney was clearly the most expensive city, followed by Melbourne, Brisbane, Perth, Adelaide and Hobart.

“Considering all these comparisons are made against the same value insured, it can only be assumed that Sydney residents are more likely to make claims or face significantly higher risks than their counterparts across the rest of the country,” Cannex head of research Steve Mickenbecker says.

The report also looks at the issue of underinsurance. Harry Senlitonga, a financial analyst at Cannex, says the big problem is that many people struggle to accurately identify the value of their home and possessions, which can lead to heartbreak when they discover their home insured for $250,000 is actually going to cost $500,000 to re-build.

He points out that doubling the amount insured doesn’t mean doubling of the size of your premium. For example, increasing your insurance cover from $250,000 to $400,000 for a home in Sydney only results in the premium rising 23%.

Senlitonga is also an advocate of shopping around each and every year. He explains that premiums are priced according to each insurer’s claim history in an area over the last five to 10 years. Different insurers have different histories and so will offer different prices.

“Shopping around every year is a good idea to get the best deal,” he says.

Cannex’s five-star insurers

 

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