The NSW property insurance savings window has opened
With the ESL changes, now's the time to put your insurance under the magnifying glass.
Property insurance prices are already dropping significantly in advance of the NSW Emergency Services Levy (ESL) being phased out of property insurance premiums. Homes and businesses will both feel the impact, with this levy previously accounting for around 20% of home insurance premiums, and as much as 40% of business property insurance premiums.
Will your insurance premiums drop by 20-40%?
In general, one might expect a home insurance premium reduction of 20% in July 2017, compared to the year before. Many insurers have committed to lowering their premiums in line with these changes but home insurance premiums in particular can vary widely between insurers and locations. As such, you might be able to get premium drops of well over 20%, compared to the year before, switching insurers.
Even before these changes, you could still find price differences of well over $1,000 from different insurers for the exact same property, so the real savings are still dependent on shopping around. As Insurance Monitor Professor Allan Fels says, "In Bradbury, for example, it could cost almost 2.5 times higher depending on who you insure with - that could be a saving of over $1,700."
The removal of the ESL from the prices means the field could shift once again, and that insurers might be quoting more competitive prices because there's so much movement in the market. Property insurance premiums are already responding to the upcoming changes, and potentially reflecting the new status quo. Although the changes will only take full effect on 1 July, it's already making a difference so shopping around sooner might help you maximise your savings.
From January off 2017 to May, the average ESL rates across 12 insurers has already dropped from 20% to 13%, and according to the ESL Monitor, people in Sydney getting a quote in May are seeing average savings of around $200.
This comes at a time when property insurance prices are rising overall in Australia's other capital cities, so Sydney residents really are in luck.