Are Australian homes becoming harder to insure?

Insurance costs have risen sharply across Australia in recent years. Insurance CPI rose 16.2% in the year to December 2023, the fastest rise since March 2001, before easing through 2025.

The Australian Prudential Regulation Authority (APRA) estimated that 1.4 million Australian households, or 15% of the roughly 10 million freestanding houses modelled in its climate stress test, were effectively uninsured under its 2024 baseline. This means the modelled annual premium would cost four or more weeks of household income. Under APRA’s scenarios, that share could reach 25–26%, or about 2.4 million households, by 2050.

The pressure is uneven. A federal reinsurance pool reduced average combined home premiums by 11% per $100,000 insured for medium-to-high cyclone-risk properties in northern Australia after insurers entered the pool. Meanwhile, average home and contents premiums in the rest of Australia rose 10% in 2024–25, the fastest increase among the four regions tracked. About 60% of the homes APRA estimated were effectively uninsured were in New South Wales and Queensland.

Where the pressure concentrates: outside the cities, and in two states

This projected pressure is already uneven by area type. In 2024:

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

By 2050, that gap widens further:

• Capital cities: roughly 20%
• Regional centres: over 30%
• Rural areas: over 40%

Around 60% of the households APRA modelled as uninsured were located in New South Wales and Queensland, both under the 2024 baseline and in the 2050 scenarios. The share of Statistical Area Level 4 (SA4) regions where more than a third of households are modelled as uninsured could rise from about 8% under the 2024 baseline to over 25% by 2050.

The cyclone reinsurance pool has reduced average premiums for properties facing medium-to-high cyclone risk, but it has not produced lower premiums across every risk category or attracted new insurers to northern Australia.

The pool commenced on 1 July 2022, though insurers joined at different times: large insurers by the end of 2023, and small insurers by the end of 2024. As a result, the ACCC's pre-pool and post-pool comparisons are measured against the date each insurer joined, rather than a single market-wide date.

For medium-to-high cyclone-risk properties, the average combined home premium per $100,000 sum insured fell by 11% after insurers entered the pool. Second-year post-pool premiums in this band were 14% below pre-pool levels.

Post-pool premium decreases recorded in several northern Australian cities:

• Karratha: down 15%
• Mackay: down 14%
• Cairns: down 12%

Strata and small-business premiums in the same risk band fell 8% and 24% respectively.

Premiums for nil- and low-risk properties also increased after the pool began:

• Combined home cover: nil-risk up 6%, low-risk up 3%
• Small business: up 10% for both nil- and low-risk

According to the ACCC, these increases were unlikely to be caused by the pool and were more likely to reflect broader premium increases. Reinsurance is not charged on nil-risk policies. For low-risk properties, ARPC sets premiums broadly in line with what private reinsurers would have charged without the pool.

Has the cyclone pool improved insurance availability?

No new insurers have entered northern Australia since the pool's introduction, and existing insurers have shown limited appetite to expand their exposure, despite the pool's aim of encouraging more competition.

An ACCC survey of 1,039 homeowners conducted between 16 January and 5 February 2026 found:

• Nearly three in 10 households in medium-to-high cyclone-risk areas rated the number of insurers offering them cover as inadequate or completely inadequate, compared with fewer than one in 10 in nil-to-low-risk areas.
• About half of all households surveyed nationally, regardless of cyclone risk, rated their home insurance as unaffordable or barely affordable.
• Almost one in 10 financially stressed households in higher-risk areas cancelled their home insurance at their last renewal.

Which Australian regions have the highest cyclone-pool premiums?

The Pilbara zone in Western Australia had the highest average annual home-building cyclone-pool premium of any CRESTA zone as at 31 December 2025, at $2,312. This was more than 13 times the pool-wide home-building average of $169.

These are wholesale reinsurance premiums paid to the cyclone pool, not households’ full retail home insurance premiums.

What cyclone mitigation discounts does the pool provide?

Cyclone-pool mitigation discounts range from 8% for roller-door bracing to 30% for a complete roof replacement and tie-down on homes built before 1982. Eligible uptake remains small: as at 31 December 2025, only about 2.0% of home-building risks in the pool qualified for the floor-elevation discount, and other measures sat below 1.6%.

The total mitigation discount applied to in-force premiums had grown to $9.4 million by 31 March 2026, against a pool covering around 3 million home buildings.

How can mitigation be recognised in insurance pricing?

The Hazards Insurance Partnership published eight guiding principles for resilience investment in March 2026. The principles support investment in measures that materially reduce risk at the household or community level. Examples include raising homes to reduce flood risk and constructing levees or detention basins.

The principles also state that insurers should recognise risk reduction in the peril component of insurance premiums and consider whether mitigation improves insurance availability. However, they do not prescribe a particular premium reduction.