Insurance premiums can sometimes feel like they’re going up for no clear reason. Whether it’s for your car, home, or other general insurance, the truth is premiums are based on a range of factors that shift over time.

Understanding what drives these changes is the first step in managing your costs effectively.

Here’s what you need to know—and what you can do about it.

Why Do Insurance Premiums Rise?

  1. Increased Claims in Your Area
    If your area has seen a rise in claims, such as for theft, car accidents, natural disasters, or flooding, insurance companies often adjust premiums for everyone in that location. For example, more frequent bushfires or storms due to climate change have led to premium hikes in some parts of Australia.
  2. Your Personal Claims History
    If you’ve recently made a claim, your insurer may view you as a higher risk, leading to higher premiums. Even small claims can impact your future premiums.
  3. Rising Costs of Repairs and Replacements
    The cost of labour, parts, and materials continues to climb. For car insurance, this means more expensive repairs. For home insurance, it may mean pricier construction costs, especially with supply chain delays and inflation.
  4. Changes in Risk Assessment Models
    Insurance companies continually update their algorithms and risk assessments based on new data. Something that wasn’t considered high-risk a year ago might now be flagged, increasing premiums.
  5. Economic and Regulatory Factors
    Inflation, changes in interest rates, and new government regulations all have an indirect effect on insurance costs. Insurers may need to adjust premiums to maintain profitability or meet compliance obligations.

How to Cope with Rising Premiums: Top 5 Tips

  1. Review Your Coverage Regularly
    Sit down with your general insurance broker or adviser once a year to go through your policies. Make sure you’re not over-insured or paying for cover you don’t need. Conversely, ensure you’re not under-insured, as this can be financially devastating in the event of a major claim.
  2. Shop Around and Compare
    Loyalty doesn’t always pay in insurance. While your current insurer might offer a renewal discount, competitors might have better deals for similar or better coverage. Your adviser can help you compare options and switch if it makes sense.
  3. Consider Adjusting Your Excess
    A higher excess (the amount you pay out of pocket in the event of a claim) usually means a lower premium. If you have the financial means to absorb a higher excess, this can be a cost-saving strategy. Be sure to weigh the risk before making this decision.
  4. Bundle Your Policies
    Insurers often offer multi-policy discounts when you combine home, car, and contents insurance. Not only can this save money, but it also simplifies your insurance management. Your adviser can help structure a bundle that fits your needs.
  5. Focus on Risk Reduction
    Proactively reducing your risk can lead to lower premiums. Install a home security system, park your car in a garage, or take defensive driving courses. These actions can demonstrate to insurers that you’re a lower-risk client.

Talk to your General Insurance Broker or Adviser

Dealing with insurance can feel overwhelming, but you don’t have to do it alone. A qualified general insurance broker or adviser can assess your situation, recommend tailored strategies, and potentially save you hundreds of dollars each year. They also stay updated on market changes and new products that might offer better value or coverage.

In a rapidly changing environment—whether due to climate, economic factors, or personal circumstances—staying informed and proactive is the key to managing your insurance costs. Speak to your broker or adviser today to ensure you’re not paying more than you need to.

If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.

This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.

(Feedsy Exclusive)

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.