An insurance renewal can increase sharply even when you have not made a claim or changed anything obvious. Insurers reassess risk and pricing each year, and the cost of repairs, replacement parts, building work, severe-weather claims and reinsurance can all affect the new premium.
Your personal details may also have changed, an introductory discount may have expired or the insurer may simply price your risk differently from its competitors. The increase is not automatically a mistake—but it should never be accepted without checking the policy properly.
Why insurance renewals increase
| Possible reason | What may have changed | What you can do |
|---|---|---|
| Higher repair and replacement costs | Parts, labour, vehicles, building materials or household goods cost more | Check that insured values are realistic and compare equivalent policies |
| Extreme-weather exposure | The insurer has reassessed flood, storm, bushfire, hail or cyclone risk | Compare insurers because their risk models and appetite can differ |
| Claims costs across the market | Insurers are paying more or more-frequent claims in your insurance category | Shop around while maintaining the cover you genuinely need |
| Your circumstances | Address, vehicle use, drivers, parking, renovations, security or claims history | Check every listed detail and correct anything inaccurate |
| Automatic indexation | The building, contents or benefit amount increased at renewal | Confirm the amount is adequate without being obviously unrealistic |
| Discount expired | A first-year, online or promotional discount no longer applies | Compare the full ongoing price rather than the original discounted premium |
| Insurer pricing strategy | The insurer now wants more premium for your risk profile or location | Obtain direct quotes from competing insurers |
| Payment method | Monthly instalments, card fees or other charges increase the total cost | Compare the total annual cost of every payment option |
The first checks to make
- Do not ignore the renewal date. Give yourself enough time to investigate without accidentally becoming uninsured.
- Find last year’s documents. Compare the annual premium, insured amounts, excesses, optional benefits and listed details.
- Correct inaccurate information. Contact the insurer if your address, vehicle usage, parking, claims history, security or other details are wrong.
- Obtain several comparable quotes. Use the same people, property details, sum insured, excess and optional benefits wherever possible.
- Read the current PDS. Do not assume a policy with a similar name provides identical cover.
- Ask your insurer to review the premium. Mention competitive quotes and ask whether any discounts or rating details have been missed.
- Decide before renewal day. Confirm cancellation or replacement arrangements in writing where practical.
Why prices rise even when you have never claimed
Insurance pools the premiums of many customers to pay claims made by some of them. Your premium therefore reflects more than your individual claims record.
An insurer may face higher average repair costs, more severe-weather claims, rising legal expenses, expensive technology in modern vehicles or higher rebuilding costs. It may also change how it assesses your postcode, property type, vehicle or driver profile.
A claim-free history may still earn a discount or influence the price, but it does not isolate you from broader changes in the cost of insurance.
Why car insurance has become more expensive
Modern cars can be costly to repair after what appears to be a minor collision. Bumpers and windscreens may contain cameras, radar sensors, parking sensors and calibration-sensitive safety equipment.
Premiums can also be affected by:
- higher prices for replacement vehicles and parts;
- increased labour and repair costs;
- parts delays that lengthen hire-car periods;
- greater vehicle theft risk in some areas;
- hail, flood and storm claims;
- the age and claim history of listed drivers;
- where the vehicle is kept overnight;
- annual kilometres and business use;
- vehicle modifications; and
- changes to agreed or market value.
A vehicle’s value can fall while its premium rises because the cost of repairing it, providing liability cover and handling claims may still increase.
Why home insurance renewals can jump
Home insurance pricing is strongly influenced by the estimated cost of rebuilding and the property’s exposure to natural hazards. Building materials, demolition, labour, professional fees, debris removal and updated construction requirements can all affect the amount required after a major loss.
Location can also make a significant difference. Insurers may reassess exposure to:
- riverine, flash or coastal flooding;
- bushfire;
- cyclones;
- hail and severe storms;
- land movement;
- access difficulties; and
- local building and repair capacity.
Two insurers can quote very different amounts for the same property because they use different risk models, data, policy terms and pricing strategies.
Check whether your sum insured has changed
Home and contents policies may increase the sum insured automatically at renewal to account for rising costs. This can increase the premium, but simply lowering the sum insured to reduce the bill can leave you underinsured.
The market value of your home is not the same as its rebuilding cost. Land value is generally irrelevant to the rebuilding amount, while demolition, site access, debris removal and updated building requirements may be highly relevant.
Use a reputable building or contents calculator as a starting point and read what the policy includes outside the stated sum insured. Consider professional advice for unusual, high-value or complex properties.
Has an introductory discount disappeared?
Some insurers offer online, new-customer or promotional discounts. These may apply only to the first policy period or reduce over time.
Look at the renewal notice and previous schedule for references to:
- online discounts;
- new-policy discounts;
- multi-policy discounts;
- no-claim discounts;
- loyalty benefits;
- campaign or promotional discounts; and
- annual-payment discounts.
Ask the insurer which discounts applied previously and which apply now. Concentrate on the final annual price and policy quality rather than the size of an advertised discount.
Could incorrect information be costing you?
A small error can affect the price or create problems during a claim. Review the renewal schedule carefully instead of assuming the insurer’s records are correct.
For car insurance, check:
- the vehicle model, variant and year;
- every regular driver;
- driver ages and licence details;
- claims and incident history;
- annual kilometres;
- private, commuting or business use;
- overnight parking location;
- finance details;
- modifications and accessories; and
- agreed or market value.
For home and contents insurance, check:
- the property address and construction details;
- roof and wall materials;
- occupancy and usage;
- building and contents sums insured;
- renovations or extensions;
- security features;
- business activity conducted at home;
- listed valuables;
- flood and other optional cover; and
- claims history.
Answer questions accurately. Changing details merely to obtain a cheaper quote can undermine the policy and cause serious difficulty when making a claim.
Should you increase the excess?
A higher excess often reduces the premium because you agree to contribute more towards a claim. This can be sensible when the saving is meaningful and you can comfortably pay the excess at short notice.
Before changing it, compare:
- the annual premium saving;
- the increase in the standard excess;
- additional age, inexperienced-driver, theft or event excesses;
- whether multiple excesses can apply to one claim; and
- how many claim-free years it would take for the premium savings to equal the extra excess.
For example, accepting an additional $1,000 excess to save only $80 per year would take more than twelve years of savings to recover that extra amount. That may not be worthwhile for many households.
Agreed value vs market value
For comprehensive car insurance, the choice between agreed and market value can affect both the premium and a total-loss settlement.
- Agreed value: A specified value accepted for the policy period, subject to the policy terms and deductions.
- Market value: The insurer determines the vehicle’s value at the time of loss using the policy definition and relevant market information.
A lower agreed value may reduce the premium but can also reduce a total-loss payment. Compare quotes using equivalent values and check how the policy handles registration, unused premium, excesses and finance after a total loss.
Why the cheapest quote may not be the best value
A cheaper policy can cost more when you need it if it has higher excesses, narrower cover or lower limits. Compare the Product Disclosure Statement, policy schedule and Key Facts Sheet where applicable.
| Feature to compare | Questions to ask |
|---|---|
| Premium | What is the complete annual cost, including instalment or payment charges? |
| Excesses | Which standard and additional excesses could apply to the same claim? |
| Insured amount | Are the agreed value, building sum and contents limits genuinely comparable? |
| Covered events | Are flood, storm, fire, theft, accidental damage and other relevant events included? |
| Exclusions | What situations, drivers, property types or causes of damage are excluded? |
| Limits | Are there sub-limits for jewellery, electronics, collections, temporary accommodation or other benefits? |
| Settlement method | Can the insurer repair, replace, rebuild or choose a cash settlement? |
| Choice of repairer | Can you choose the repairer, and does using your choice affect guarantees or cost? |
| Optional benefits | Are hire car, roadside assistance, portable contents or accidental damage included or extra? |
Comparison websites do not show the entire market
Comparison websites can help establish a price range, but they may not include every insurer or every policy. Some earn commissions or display sponsored results.
Use them as one part of the search. Obtain direct quotes from several insurers and check whether apparently different brands use the same underwriter. Policies sold by the same underwriting group can still have different features, limits and service arrangements.
Should you call your existing insurer?
Yes. Once you have comparable quotes, ask the current insurer to review the renewal.
Questions worth asking include:
- Why has the premium increased?
- Have any discounts expired?
- Are all rating details and claims records correct?
- Can the policy be repriced using the current information?
- Would paying annually reduce the total cost?
- How much would different excesses change the premium?
- Have the cover limits or insured values changed?
- Are there optional benefits you no longer need?
The insurer may offer a lower price, but compare the revised policy carefully. A discount is not a saving if it comes from removing cover you intended to keep.
When should you stay with the same insurer?
Staying may be sensible when:
- the premium remains competitive for equivalent cover;
- the policy includes benefits that are valuable to you;
- the insurer accepts risks that competitors exclude;
- you are satisfied with previous claims service;
- switching would introduce new exclusions or waiting periods; or
- the apparent saving elsewhere is caused by a higher excess or lower insured amount.
Loyalty by itself is not a reason to stay, but price alone is not a reason to leave.
When should you consider switching?
Consider switching when another policy provides genuinely comparable or better protection for a meaningfully lower total cost, or when the current insurer no longer suits your circumstances.
Before cancelling:
- Read the new PDS and policy schedule.
- Confirm all information supplied in the application is accurate.
- Check the policy start date and payment have been accepted.
- Obtain written confirmation of cover.
- Only then cancel or decline renewal of the old policy.
- Check whether the former insurer owes you any refund or charges a cancellation fee.
What if you cannot afford the renewal?
Contact the insurer before the policy expires. Ask about payment options, a different excess, removal of unnecessary optional benefits or another suitable policy within the insurer’s range.
For home insurance, avoid reducing the building sum below a reasonable rebuilding estimate merely to make the premium affordable. Compare the market and consider whether property-resilience improvements could help over time.
If you are experiencing financial hardship, ask the insurer about its hardship support. Free financial counselling is also available through the National Debt Helpline on 1800 007 007.
What if the insurer will not renew the policy?
An insurer may decline renewal because its risk appetite has changed, the claims history has altered or it no longer offers cover for that property, vehicle or location.
Ask for the reason in writing and check that the information used is accurate. Start obtaining alternative cover immediately because specialist insurers or a licensed insurance broker may need more time.
Do not provide false or incomplete information to another insurer. A previous cancellation, refusal or special term may need to be disclosed when specifically asked.
A practical renewal checklist
- Open the renewal notice as soon as it arrives.
- Compare it line by line with last year’s schedule.
- Check insured amounts, excesses, drivers, usage and property details.
- Identify expired discounts and added optional benefits.
- Estimate the cover you genuinely need.
- Obtain several quotes using matching information.
- Read the PDS, exclusions and important limits.
- Ask the existing insurer to review its price.
- Choose the best overall value—not automatically the cheapest premium.
- Confirm replacement cover before cancelling anything.
Sources and further reading
- Moneysmart: Choosing home insurance
- Moneysmart: Contents insurance
- Moneysmart: Choosing car insurance
- Moneysmart: How to save money on car insurance
- Insurance Council of Australia: Drivers of rising insurance costs
- Insurance Council of Australia: General Insurance Code of Practice
- National Debt Helpline
Need a second opinion?
Ask Adrian before making the decision.
Tell us what you are choosing between, what matters most to you and what you have already checked.