Consumer advocacy group Choice has done its homework on home and contents insurance, naming the Australian insurers with the most eye-watering price hikes in the past year.
Where the average home insurance premium has gone up by 16% in the last 12 months, Kogan, RAC and Honey’s average prices have risen by more than 30%.
“In the vast majority of cases, the price went up,” said Daniel Graham, an insurance expert at Choice. “Out of the 35 insurers we looked at, 19 of them increased prices for at least 90% of the test addresses.”
Experts compared quotes from 35 insurance companies collected in January 2025 with ones by the same brands assessing the same scenarios in January 2024.
Mid-price insurer Kogan, a company underwritten by QBE, had an average price jump of 37.9%. RAC raised its average quote by 32.6% and Honey, which is underwritten by RACQ, hiked its costs by 30.7%.
“There were several external factors that drove premium increases across the industry last year,” said a spokesperson for RAC, “including high supply chain inflation and claims costs, as well as higher reinsurance costs caused by severe weather events in parts of Australia and internationally.”
South Australian insurer RAA, which raised its rates by an average of 27.1%, had a similar response. A spokesperson for the company said: “Every policy is different, but the main contributors to industry premium increases last year were the growing frequency of extreme weather events, increased reinsurance costs and the rising costs to repair or replace homes.”
Jodi Bird, a Choice insurance expert, said the increase in natural disasters in Australia was a significant factor.
A 2022 Climate Council report forecast 4% of homes across the country would be uninsurable by 2030. In the most vulnerable regions, such as Shepparton in Victoria, that figure rose to 90% of properties.
“We saw the cost of building inflation increase after Covid lockdowns, and in addition we have that extra component of natural disasters and that feeds back into insurance prices,” Bird said.
“Then of course, you’ve got the insurers still trying to make a profit at the end of it all.”
Many factors influence quotes from insurance companies, Choice’s experts said, including where you live, the level of security you have, how much you have insured your property for and what excess amount you selected when signing up.
“Insurers have many levers at their disposal to change the way their algorithm calculates your premium,” said Graham, explaining NRMA, for example, quoted higher prices in a third of Choice’s test addresses, lowered them for a third and the others remained unchanged.
“This means their average price change was 1.7% – great on paper, but … looking only at the addresses that had an increase, NRMA prices went up 24.4%. For addresses that saw a decrease, prices dropped 20.7%.”
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The average home insurance premium has increased by 16% or $359 in the last 12 months. A 2024 Compare the Market survey found more than one in four Australians did not have home or contents insurance, and an Actuaries Institute report in the same year found 1.6m Australian households are struggling to insure their homes.
What can home owners do to lower their premiums? “The first thing is to shop around when you get that home insurance renewal,” says Bird. “We see that if you stick to your existing insurer, you’ll end up paying what we call a loyalty penalty.
“Another way you can save money is to look at the excess you pay on your insurance. We see, for example, for approximately every $500 you increase your excess by your premium tends to go down by 10%. If you can afford to have a higher excess, then you can reduce the premium that you’re paying on your home insurance.”
Last week the opposition leader, Peter Dutton, proposed a market intervention to stop Australians being “ripped off” by insurance companies. The Greens followed with their own proposal to scrap stamp duty on home and car cover.
“Insurance is increasingly unaffordable and unavailable because insurance companies are either pulling out or hiking premiums and making people’s lives even harder,” said the Green’s Mehreen Faruqi.
Choice also found a handful of insurers raising their rates by less than the inflation rate of 2.4%. RACQ’s prices had changed for most quotes Choice compared, but the average evened out to an increase of 0.02%. NRMA’s average home insurance quotes were 1.7% more expensive.
One insurer lowered its quotes for most addresses tested: premium insurer Guild, owned by the Pharmacy Guild of Australia, had an average price drop of 15%.
“In the past we’ve called this insurer one to avoid, specifically because of cost, so it’s promising to see them trying to bring prices down in a world where insurance is getting ever more expensive,” said Graham.
“That said, Guild remains one of the more expensive brands on the market.”
