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How to reduce your home insurance premium

Mark Bristow avatar
Mark Bristow
- 4 min read
How to reduce your home insurance premium

There are several options available to help lower your home insurance premiums, from bundling offers to finding ways to reduce the insurer’s risk.

Home insurance is often a must-have for homeowners, as it protects against potentially huge losses from surprise accidents or other insured events. It’s also often an important part of a home loan application.

If your policy’s premium is on the expensive side, it can eat into the household budget. But if you choose the cheapest home insurance policy, you may miss out on some crucial features.

A few ways to help you save on home insurance and find the perfect balance between cost and features include:

1. Use the multi-policy discount

Australia has a competitive insurance market, and many insurers try to attract new customers by offering a variety of extra features and benefits.

Some insurers may offer special discounts to customers who have all their policies with the same insurer. This may include car insurance and house insurance, and for insurers that are also banks, it could also include financial products like credit cards or transaction accounts.

A multi-policy discount could help to cut the price of premiums and/or fees on all of your insurance policies and financial products, which could result in considerable savings.

2. Take advantage of the loyalty discount

If you’ve been with your insurer for many years, you may be able to negotiate a discount for your loyalty, much like with a mortgage lender. Often the insurer won’t want to lose your business and will offer a premium reduction. Even a small discount of 5% or 10% on your premium  could save you a fair amount of money.

Plus, if you’ve held an insurance policy for several years and haven’t made a claim, you may be eligible for a no-claim bonus or discount. Some insurers will even offer one of these no-claim discounts when you apply for a new policy if you can provide your claim history from your previous insurer.

3. Opt for a higher excess

‘Excess’ refers to the amount that you need to pay out of your own pocket when you make a claim on your insurance policy. Your premium can shrink considerably if you opt to pay a higher excess.

Remember that while increasing your excess can help to reduce your premium, you may have to pay much more if you make a claim. It comes down to your personal level of risk tolerance - you may need to make a claim at a time when your finances and your household are already under pressure, so some people consider this too much of a gamble. 

To find the amount and type of excess that applies to your policy, you can check your Certificate of Insurance.

4. Add safety features and home security

When calculating your home insurance premium, insurers consider multiple factors, including how likely you are to make a claim. If you take proactive steps to protect your property from being broken into or vandalised, so it’s less likely you’ll need to make a theft or property damage claim, you may be able to reduce the cost of your home insurance.

If you’ve installed security and smoke alarms, deadlocks, security screens on all doors and windows, home monitoring systems and other security measures, you could ask your insurer whether they can reduce your home insurance premium. Some insurers ask about your property’s level of security as a standard question on their application form.

5. Consider the area you're buying into

Your property’s location may significantly affect your home insurance premium. If your neighbourhood has a high crime rate, or natural disasters are a frequent occurrence, your insurer may charge you a higher premium than for properties located elsewhere.

It may pay in more ways than one to investigate your property’s location thoroughly before purchasing.

6. Compare your home insurance options

There is a lot of variation in the cost of cover across the insurance market, and that’s not including discounts. It’s worth browsing your options before selecting a home insurance policy that suits your needs.

Compare home insurance

Product database updated 15 Jul, 2024

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.