Home insurance costs in Australia: premiums, location risk and price increases

Home insurance premiums in Australia rose 46.4% between 2021–22 and 2024–25, taking the national mean for combined home and contents cover to $2,360 a year. Building-only cover rose faster still, up 48.4% over the same period, while contents-only cover rose 20.1%.

The rise has not been even across the country. North Western Australia's mean premium is now more than double the rest-of-Australia rate, and insured losses from declared extreme weather events reached $4.8 billion in 2025, up 727% from 2024.

SECTION 01 · NATIONAL COSTS

What does home insurance cost in Australia in 2026?

Combined home and contents insurance costs an average of $2,360 a year, equivalent to $196.67 a month. Building-only cover averages $1,852 a year, and contents-only cover averages $531. These are the latest actual mean premiums available as at July 2026, covering the 2024–25 financial year.

Monthly and weekly figures are calculated directly from the published annual mean and do not include instalment fees. Source: ACCC Insurance Monitoring Report 2026, June 2026.

The mean premium includes GST, stamp duty and other levies, along with commissions built into the price, but excludes any separate fees charged by a broker.

SECTION 02 · REGIONAL PREMIUMS

Home insurance premiums by region in Australia

North Western Australia's mean premium reached $4,966 in 2024–25, 115% higher than the $2,310 mean for the rest of Australia. The Northern Territory averaged $3,546, and north Queensland averaged $3,117. Six of the 10 highest-premium regions nationally, measured at the SA3 level, were located in north Western Australia or the Northern Territory.

Source: ACCC Insurance Monitoring Report 2026, June 2026.

The rest-of-Australia region recorded the largest percentage increase in 2024–25, up 10%, even though it remains the cheapest of the four. North Queensland was the only region where the premium per $100,000 insured fell, declining 3%, with the ACCC linking the reduction to the cyclone reinsurance pool.

SECTION 03 · PREMIUM GROWTH

How much have home insurance premiums increased?

Combined home and contents premiums rose 46.4% between 2021–22 and 2024–25, from $1,612 to $2,360. Building-only cover rose slightly faster, up 48.4% from $1,248 to $1,852, the largest increase of the three product types. Contents-only cover rose the least, up 20.1% from $442 to $531.

Even after adjusting for inflation, the increase remains. In 2024–25 dollars, the combined mean rose from $1,841 to $2,360, a real increase of $519. Building-only cover rose from $1,425 to $1,852 in real terms, a gain of $427, while contents-only cover rose by just $26 in real terms, from $505 to $531.

A longer view: the insurance price index

Annual insurance price inflation peaked at 16.4% in the March quarter of 2024, the strongest increase since 2001, before slowing to 7.6% in March 2025 and easing further to 5.5% in the 12 months to May 2026. This broader index covers motor vehicle, house and home contents insurance combined, not home insurance alone, but it is the only price series that reaches back two decades.

SECTION 04 · COST DRIVERS

Why are home insurance costs in Australia rising?

Weather perils account for 28% of the modelled average home insurance premium, and non-weather perils such as fire and theft for another 21%. Reinsurance makes up 10%, insurer expenses 20%, and taxes, levies and government charges the remaining 21%.

Rebuilding costs also play a direct role. Higher sums insured contributed to premium growth in 2024–25, and rebuilding costs run higher in northern Australia because of remoteness and higher building standards. Construction cost inflation was identified as the main reason premium growth outpaced household income growth in one of two modelled stress-test scenarios.

How reinsurance costs have affected home insurance premiums

Reinsurance, the cover insurers buy against large losses, was the biggest single driver of premium increases through 2023. It contributed to the 16.4% insurance inflation peak in March 2024, and separate Actuaries Institute modelling found that increases in reinsurance costs and retentions during 2023 were the primary reason home insurance premiums outpaced household incomes in the year to March 2024.

That pressure has since eased. Reinsurance costs fell 21%, from $208 million to $164 million, in northern Australia in 2024–25. They also fell 6%, or $231 million, across the rest of Australia, the first decline outside northern Australia since 2017–18.

Why claims are the largest home insurance cost in northern Australia

In northern Australia, claims costs made up 71% of the average cost per home and contents policy in 2024–25:

• Claims, including net claims and reinsurance: 71%
• Underwriting: 18%
• Commissions: 6%
• Other costs: 5%

Declared insurance events caused $4.8 billion in insured losses in 2025

Six declared insurance events resulted in $4.8 billion in insured losses in 2025, up 727% from $585 million in 2024 and above the $2.35 billion recorded in 2023. Insurers handled 294,000 claims across the six declared events, almost six times the number recorded in 2024.

Queensland accounted for the largest share of the damage, recording $4.18 billion of the $4.8 billion total across 255,000 claims. New South Wales recorded $539 million across 35,000 claims. Premiums are generally based on expected future losses over the policy period, rather than losses from the most recent year alone.

How insurer profitability changed in 2024–25

Insurer profitability was under pressure before this recovery: the combined operating ratio exceeded 100% in every year from 2020–21 to 2022–23, meaning insurers were making underwriting losses on home insurance across the market.

Fifteen monitored insurers reported $14.0 billion in gross earned premium from home insurance in 2024–25, up 10% from $12.8 billion. Net profit before tax, across home, contents, strata and eligible small-business insurance combined, rose 154% to $2.8 billion, driven mainly by higher premium rates and favourable reinsurance conditions. Three of the 15 insurers still recorded net losses over the year.

SECTION 05 · LOCATION AND RISK

Flood, cyclone and bushfire risk: how location affects premiums

North Western Australia's mean premium of $729 per $100,000 insured is more than double the $295 rate recorded across the rest of Australia. This gap reflects differences in exposure to flood, cyclone, bushfire, storm and hail, as well as the cost of insuring homes in higher-risk locations.

Flood risk

Flood risk affects more than half of Australian homes and is the most climate-sensitive weather peril modelled. The risk is also highly concentrated, with 50% of modelled losses occurring in just 10% of regions.

Flood is also the largest single driver of insurance affordability stress. Flood premiums make up 15% of the average premium paid by financially stressed households, compared with 2% for households that are not stressed.

Cyclone risk

The Australian Government's cyclone reinsurance pool offers the clearest evidence in this data of a government intervention measurably changing prices. Since insurers began moving policies into the pool, average premiums per $100,000 insured in medium- to high-cyclone-risk areas have been 11% lower in the pool's first year and 14% lower in its second year, compared with pre-pool policies.

Premium reductions in the selected cities ranged from 3% in Townsville to 15% in Karratha. All four cities were within the medium- to high-cyclone-risk band. Separate ARPC analysis using controlled building-only quotes found quotes in medium- to high-risk areas were 17% to 37% lower in January 2026 than in October 2022.

Affordability modelling provides a third measure. The gap in mean premiums between affordability-stressed and non-stressed households in cyclone-affected states narrowed in the year to March 2024:

• Queensland: from 61% to 42%
• Northern Territory: from 79% to 53%
• Western Australia: from 136% to 69%

Bushfire risk

Modelled annual bushfire losses reach $500 million. Although this is lower than the losses attributed to storm and hail, bushfire losses are highly concentrated, with around half occurring in fewer than 10% of regions. The Bushfire Resilience Rating Scheme has been associated with reductions of up to 60% in the bushfire component of premiums and total premium reductions of 5% to 21% for participating households.

Storm and hail risk

Storm and hail are the largest weather-loss category nationally, with modelled annual losses above $4 billion. Exposure is widespread, with almost every household affected to some degree, although around half of the losses are concentrated in about a quarter of Australia's regions.

SECTION 06 · AFFORDABILITY

Where home insurance affordability pressure is highest

Two separate models estimate that about 15% of their respective household populations face home insurance premiums exceeding four weeks of income. A homeowner survey provides a third measure: 45% of respondents rated their premium unaffordable or barely affordable.

What Australian homeowners say about insurance affordability

A survey of 1,039 homeowners, commissioned by the ACCC and conducted by ORIMA Research between 16 January and 5 February 2026, found that 6% rated their home insurance unaffordable and a further 39% rated it barely affordable.

What APRA estimates about uninsured homes

About 15% of households, or 1.4 million, faced premiums of at least four weeks of household income at the 2024 starting point. The assessment uses this threshold as a proxy for households that may be unable to maintain insurance. The modelling covers freestanding properties only, with the estimated uninsured share concentrated outside capital cities:

• Capital cities: about 11%
• Regional centres: around 20%
• Rural areas: around 25%

New South Wales and Queensland: about 60% of modelled uninsured homes nationally, and 90% of the 20 regions with the widest modelled gaps.

What the Actuaries Institute estimates about affordability stress

The Actuaries Institute estimated that about 15% of Australian households, or 1.61 million, faced home insurance affordability stress in the year to March 2024. This was up from 12% in 2023 and 10% in 2022. Affordability-stressed households spent an average of 9.6 weeks of gross income on home insurance, around seven times more than other households.

Queensland recorded the highest share of affordability-stressed households at 24%, followed by the Northern Territory at 19% and New South Wales at 17%. The Australian Capital Territory recorded the lowest share, at 5%. Local-area modelling shows the most extreme pressure concentrated in regional Western Australia, the Northern Territory, southwest Queensland and the Northern Rivers region of New South Wales.

The same study estimated that about 5% of Australian households with a mortgage were experiencing extreme insurance affordability pressure as at March 2024. These households represented $57 billion in loan balances, equivalent to 3% of all home loan assets.

SECTION 07 · COST OF OWNERSHIP

How home insurance adds to the cost of owning a home

Combined home and contents cover adds an average of $2,360 a year to the cost of owning a home, or $196.67 a month. Building-only cover adds $1,852 a year, or $154.33 a month. Home insurance is a recurring cost that sits alongside mortgage repayments, council rates, maintenance and utilities.

In the highest-cost region, the recurring amount is far larger. North Western Australia's combined mean of $4,966 a year works out to $413.83 a month. The Northern Territory's mean equates to $295.50 a month, and north Queensland's to $259.75 a month.

Home insurance can also affect access to housing finance. Lenders generally require adequate building insurance before accepting a property as security for a home loan. Reduced insurance availability or coverage may therefore limit the pool of eligible buyers, restrict lending and increase credit risk when an uninsured property is damaged.

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