New home insurance customers in NSW are paying less for the exact same policy
On average, new customers pay 25% less than existing customers.
Some New South Wales insurers are charging existing customers more than they charge new customers for the same home and contents policies, according to a monitoring study by the Emergency Services Levy Insurance Monitor (the Monitor).
The study showed that between 2015 and 2018, those renewing their policies paid an average of 25% more than those buying a policy for the first time. In dollar terms, the average gap between new policies and renewed policies fluctuated between $201 and $411 per policy during that time.
In NSW, it falls on home insurers to fund emergency services via the Emergency Services Levy (ESL) and it's the Monitor's job to ensure that the insurers don't use this as an excuse to overcharge customers. That's why it engages in studies like these.
Findings like those highlight how important it is for home insurance customers to regularly review their cover. Our analysis similarly showed that home insurance costs can differ by as much as $1,335 each year, so it makes sense to compare.
If you think you're paying too much, it's worth looking around even if your renewal date is a few months away. The penalty for cancelling your policy mid-cover is often minimal and can easily be worth it if you find a better deal elsewhere.
The Monitor is looking for public comments on their findings and is particularly interested in comments from members of the public:
- who have been with their home and/or contents insurer for a number of years and can provide evidence of changes in premiums over time
- who have switched to an equivalent policy after a number of years with a different insurer and have evidence of any savings made on their premiums
- who have re-applied for insurance for an equivalent policy with the same insurer rather than accept a renewal offer from that insurer and have evidence of any cost savings made as a result
- on whether they consider it fair for insurers to charge existing customers a higher premium than new customers
- on what measures they think regulators and/or policymakers should take to address the issue
You have until 20 December 2018 to send your submissions to the following address:
Pricing Analysis Project Team
Emergency Services Levy Insurance Monitor
consultation@eslinsurancemonitor.nsw.gov.au
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