NSW home insurance rates vary wildly from brand to brand
Major variations in home insurance quotes are hard to explain, says the Emergency Services Levy Insurance Monitor.
Some New South Wales homeowners are paying double for home insurance when compared to other people on identical properties, according to research from the Emergency Services Levy Insurance Monitor.
On a monthly basis, the Insurance Monitor gathers home insurance quotes for 11 different properties around NSW from 12 different brands. In May, the average yearly premium for all properties was $1,813 but the individual quotes varied wildly.
“This survey of premium prices quoted by 12 major insurers shows there are significant variations in pricing between brands for essentially the same insurance cover,” Emergency Services Monitor professor Allan Fells AO said in a statement.
Insurers who quoted well above the average in May included NRMA, One Path, and QBE. Insurers who quoted well below the average in May included Allianz, Woolworths, Coles and AAMI.
The insurance industry has come under government scrutiny lately, in part, because of inexplicable variations in pricing. While that's being sorted out, Fells says homeowners should take advantage of the fact that searching around for a better quote is easier than ever.
“There is no doubt that many consumers could save hundreds of dollars by shopping around and switching to a cheaper supplier”, Fells said.
The report also looks at how insurers are factoring the Emergency Services Levy (ESL) into their premiums. Under the current insurance-based system, home insurance companies are responsible for contributing toward the costs of emergency services in NSW. While they are allowed to pass this cost onto the customer, there is no law stating how they must do so. Since it is not an exact science, it is the Insurance Monitor's job to make sure customers are refunded in the event of an overcharge and that insurers don't use the ESL as an excuse to increase base premiums unreasonably.
The only significant change to ESL rates in May was by Comminsure who reduced its rates from 23% to 18.5%. Base premiums increased by an average of 2.5% since last May, but the only insurer to catch the attention of the Insurance Monitor was Suncorp with a 17.5% increase in base premiums.
“Suncorp needs to demonstrate that the re-establishment of ESL is not being used as an opportunity to increase base premiums unreasonably”, Fells said.
The current system of emergency-services funding was supposed to be replaced in July 2017 by a property-based system where this levy would be collected by councils, but this transition has been delayed until June 2019.
- New home insurance customers in NSW are paying less for the exact same policy
- It pays to switch home insurers
- Cold snap prompts heater warnings
- Australia drops from 37 to 50 among countries ranked by residents’ own feelings of safety
- Australians are leaving their homes vacant, inviting burglars to help themselves