Aussies are shelling out 10% more on insurance this year. What gives?
Insurance spending has witnessed one of the largest increases this year, while essentials have taken a backseat. Is the cost of living crisis behind us?
Ok, that's probably a bridge too far. But it is a sign that Aussies are spending less on average for our necessities.
Commbank iQ has just released its annual Cost of Living Insights report, which compares the spending habits of more than 7 million Australians in 2024.
Compared to last year, the growth rate in essential spending has halved, while there's been an uplift in discretionary spending.
What the hell does that mean?
Aussies are taking more control of their budget. And according to Wade Tubman – Head of Innovation and Analytics at Commbank IQ – it may be the start of brighter days.
Essential spending growth has more or less tracked inflation in recent years. However, it has now seen a significant decrease. That offers people more control of their budget, and if medical and insurance costs can follow, it will mean the pressure on life's necessary expenses has passed.
So is it the start of brighter days? I'm not so sure.
More cash to go around?
It may be true that Aussies are spending less on essentials. But apparently, most of us are just spending less overall.
According to Commbank IQ's research, young and middle aged Australians have cut back on both discretionary and essential spending.
18-29 year olds are spending 2% less overall , while those aged 30-39 are spending 1% less.
Swapping necessities for necessities
As the cost of living crisis continues, it's not surprising many Aussies are looking to secure a safety net for their future.
The uncertainty of our economy is growing a taste for certainty and peace of mind.
And buying insurance and investing in long-term health seems like the best way to achieve it for many people.
Even if it means cutting back on the essentials for the long haul.
Compare and save on health insurance with Finder today.
Why is it so! Many Insurers have quietly made changes in PDS descriptions which exclude further claims, and have added Excess sums payable on policies previously without. Past policies continuing with a claims excess, have sharply increased excess sums payable. Then add the premium increases on us and we are being hammered. It is startling to read our premium total and in the event of say a “household claim”, have to front with an additional $700/800 Excess to proceed.
Someone appears to be double dipping, and a claim in a dollar amount under the hundreds of dollars of Excess, “is of course not a claim” so we ware it. Not reasonable!
Hi Adrian,
The cost of insurance has soared the last few years for a number of reasons, which as you’ve noted, is very frustrating. Because every insurer prices risk differently, premiums can vary widely between insurers for the exact same policy. That’s why it’s always worthwhile shopping around for the best price, so you don’t pay more than you need to.
Hope this helps!