How to save money on home insurance

As the rising cost of living continues to wreak havoc on day-to-day necessities for Australians, if you’re a homeowner, you might feel like you’re really bearing the brunt. From paying mortgages and home insurance premiums, to utility bills, repairs and maintenance— owning a home is likely the number one non-negotiable doing the most damage to your bank account. 

Stressed? Rightly so. According to the Australian government, if you're currently spending more than 30% of your income on housing, then you're considered to be under "housing stress". The silver lining is there are a number of things you can do to ease the financial pressure of owning a home, and taking a good look at your home insurance is a great place to start.  

Things like checking you have the right policy, by being aware of loyalty tax and how this can add on average 34% more to your premium, and being mindful of ways to prevent making claims can significantly reduce your insurance payments. 

Here are the top 3 ways to start saving money on your home insurance, today. 

1. Do an insurance health check

   A recent survey by Finder found that 63% of Australian home and contents insurance customers (7.4 million people) said their premiums have risen in the past 12 months. Despite this, only 11% of home insurance customers have switched brands in the last six months. 

   The thing that you you might realise it— there’s no need to wait for your renewal notice to arrive to see if you can save money on home and contents insurance. If you have an existing policy, you can cancel anytime. Just keep in mind there may be a cancellation fee, but the savings you could get from switching may well outweigh the cost to cancel. Also, you’ll receive a pro-rata refund for the remaining period of your insurance if you’d paid for the year in full. 

   If you do wait for your renewal to roll around, it pays to read the fine print. As of July 1 2021, a change in legislation from the Insurance Council of Australia now requires insurance companies to state the previous year’s premium on all renewal notices. So now, you can instantly see just how much your premium has increased.

2. Be proactive about preventing claims

   The most obvious way to keep home insurance costs down is preventing claims in the first place. Australians spent a whopping $4.9 billion in claims last year, and with 50% of all claims being avoidable, it makes sense to look at ways you can avoid accidents from happening. 

   A lot of Australians don't understand that if you make a claim, your premium will go up so it's so important to try and avoid raising premium prices by being savvy. Honey focuses on exactly this and believes that the best claims experience is avoiding the claim altogether— by knowing what is happening in your home. With Honey’s smart technology, our smart home sensors alerts your smartphone to accidents like fire, theft and water damage, to help avoid costly claims. Customers can choose to include complimentary smart home sensors on eligible Honey home and contents policies.

3. Be aware of loyalty tax

   Did you know loyal consumers are paying up to $3.6 billion annually? That staying with your provider might could be costing you around $140 a year? 

   For years Australian consumers have been offered a discounted price as new business customers, whilst ‘loyal’ customers pay a higher premium, even though they are the ones that have been loyal. As mentioned, research in 2019 showed, on average customers renewing their insurance policy paid 34% per cent more than new customers.

   This happens across all industries but is particularly prevalent in the insurance industry. Honey is passionate about this subject and feels it’s not fair that existing customers end up compensating new customers being offered discounted rates. 

   It’s the perfect time for Australians to look at their current insurance policies and to compare to other providers to see if they could save money. Honey makes it easy to check you have the right deal by reducing the time to compare from the industry norm of 40 min, to just 3 minutes. And, due the AI and third party we use to provide a quote - who doesn’t have 3 mins to check they have the best deal?

   
   You’ve got to start somewhere to reduce insurance costs, and that somewhere is right here. Compare now.