If you own a home in Australia, your building insurance bill has probably gone up. The average annual premium for home and contents now sits at $2,795. That’s a significant chunk of change, and it’s not just a one-off jump. Between January 2025 and January 2026, new policies rose by an average of 4.1%, adding roughly $153 to the yearly bill. Understanding what drives these costs and where you might find relief is more important than ever.
Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.
This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
These numbers tell a mixed story. Costs are climbing for many, but a sizeable chunk of homeowners are actually seeing lower quotes if they shop around. The trick is knowing which factors matter most to your premium and where the market is heading. Here’s what you actually need to know.
Before we go further, let’s pin down a central concept. Building insurance covers the physical structure of your home — walls, roof, floors, fixtures. It’s different from contents insurance, which covers your belongings inside. If you’re unsure about the split, it’s worth reading up on building insurance vs contents insurance to see where your cover starts and ends.
What I tend to notice is that many homeowners treat their renewal notice as a fixed price. It’s not. The data shows real movement in both directions, and understanding that is the first step to getting a fairer deal.
What’s really driving your premium up
Insurance companies don’t pull numbers out of thin air. They calculate risk, and that risk has been rising. The cost of rebuilding a home has climbed with inflation in materials and labour. At the same time, extreme weather events are becoming more frequent, which means insurers are paying out more claims. Those costs get passed back to you.
The Consumer Price Index sat at 3.5% in 2025, while insurance and financial services inflation was a bit lower at 2.5%. But some insurers blew past that figure entirely. Kogan raised prices by 15.5%, AHM by 13%, Honey by 12.2%, and Apia by 11.2%. Those aren’t small adjustments — they’re fundamental repricings.
Your personal risk factors matter too. If you live in a bushfire-prone area, a flood zone, or a region with frequent hailstorms, your premium will reflect that. Insurers also look at your home’s age, construction materials, and even your claims history. One big claim can nudge you into a higher risk bracket for years.
There’s also a less obvious factor: the insurer’s own business decisions. When Kogan changed underwriters in 2025, the new policies came with different conditions, exclusions, and limits. A price hike of 15.5% wasn’t just a rate increase — it was a different product. That’s worth keeping in mind when you see a big jump on your renewal. It might not be the same cover you had before.
Where people get tripped up on building insurance costs
Assuming your renewal is the best available price
This is the most common mistake I see. The data from Choice tracked 5,330 addresses and found that 40% of homes had a cheaper cheapest quote in January 2026 than they did in January 2025. That means two in five homeowners could potentially lower their bill just by looking elsewhere. Insurers like QBE cut prices by 2.1%, Aldi by 5.7%, Sure by 7.2%, and RAC by 8.9%. Those reductions didn’t happen automatically — they were available to new customers who shopped around.
Ignoring the fine print on policy changes
When an insurer changes underwriters, the policy can shift in ways that aren’t obvious from the premium alone. Kogan’s 15.5% average increase came with new terms. Some homeowners in NSW and ACT actually saw price cuts, while those in NT, SA, northern Queensland, and Tasmania saw bigger increases. The same brand, different outcomes. Always check what’s covered, not just what it costs. A cheaper policy with gaping exclusions is no bargain.
Overlooking the difference between building and contents
Many policies bundle building and contents, but the costs are separate. The average building premium is $2,485, while contents average $520. If you’re over-insuring your contents or under-insuring your building, you’re either wasting money or leaving yourself exposed. Getting the split right matters. A clear understanding of policy jargon can help you spot where you’re paying for cover you don’t need.
Not factoring in your excess level
Your excess — the amount you pay before insurance kicks in — directly affects your premium. A higher excess usually means a lower annual cost. But you need to be realistic about what you could afford to pay out of pocket if something happened. The sweet spot varies by household, but it’s worth running the numbers. Sometimes raising your excess by a few hundred dollars can shave a meaningful amount off your yearly bill.
→ Scroll right to see all columns
| Insurer | Price Change (Jan 2025–Jan 2026) | Notes |
|---|---|---|
| Kogan | +15.5% | Changed underwriters; new terms and exclusions |
| AHM | +13% | Above average increase |
| Honey | +12.2% | Same cover as Aldi but ~25% more expensive |
| Apia | +11.2% | Above average increase |
| RAC | -8.9% | Reduced premiums at half of tracked addresses |
| Aldi | -5.7% | Same cover as Honey at lower price |
| QBE | -2.1% | Modest reduction |
How to get a handle on your building insurance costs
Start with a realistic rebuild estimate
Your sum insured should reflect what it would actually cost to rebuild your home today, not what you paid for it or what it’s worth on the market. Construction costs have risen with inflation, and underinsuring is a common trap. If your policy doesn’t cover the full rebuild cost, you could be left with a shortfall after a total loss. Many insurers offer online calculators, but getting a professional valuation every few years is a safer bet. You can also use a home insurance valuation guide to help you work through the numbers yourself.
Compare policies, not just prices
Price is important, but cover matters more. Two policies at similar premiums can have very different exclusions, limits, and excess structures. The Choice data shows that Aldi and Honey offer essentially the same cover, but Aldi is about 25% cheaper. That’s a direct comparison worth making. When you’re comparing, look at what’s excluded — water damage, storm surge, and accidental damage are common gaps. A closer look at water damage exclusions can reveal whether your policy actually covers the most common household disasters.
Time your switch carefully
If you find a better deal, don’t cancel your existing policy until the new one is active. A gap in cover leaves you exposed. Most insurers allow you to overlap policies by a day or two to ensure continuity. Also, check whether your current insurer charges a cancellation fee. Some do, and it can eat into the savings from switching. The best time to shop around is a few weeks before your renewal date, giving you time to compare without pressure.
Consider what you can control
Some risk factors are fixed — you can’t move your house to a lower-risk area. But you can take steps that insurers may reward. Installing deadlocks, smoke alarms, and security systems can sometimes lower your premium. A video doorbell camera with motion detection and two-way audio can act as both a deterrent and evidence in a claim. While no single device guarantees a discount, a home with visible security measures is generally seen as lower risk. It’s worth asking your insurer what discounts they offer for specific upgrades.
Watch for emerging trends in the market
The insurance landscape is shifting. Climate change is making extreme weather more common, and insurers are responding by adjusting their risk models. Some are pulling out of high-risk areas altogether. Others are introducing higher excesses for specific perils like cyclone or bushfire. Over the next few years, we’re likely to see more granular pricing — where your premium is based on hyper-local risk data rather than broad postcode averages. That could mean lower costs for some and higher costs for others. Staying informed about how climate change affects premiums can help you anticipate changes before they hit your renewal.
Frequently asked questions about building insurance costs
Why did my building insurance go up even though I didn’t make a claim? ▾
Is it worth switching insurers every year? ▾
Does a higher excess always mean lower premiums? ▾
What’s the difference between sum insured and market value? ▾
Can my insurer refuse to renew my policy? ▾
Does installing security cameras lower my premium? ▾
The market is moving — don’t let your policy stand still
Building insurance costs in Australia are not a one-way street. While the average premium has climbed, a significant number of homeowners are finding cheaper options by shopping around. The insurers that raised prices most aggressively — Kogan, AHM, Honey, Apia — are not the whole market. Others cut prices, and some offer identical cover at very different rates. The key is to treat your insurance as an active decision, not a passive renewal. Check what you’re covered for, compare it to what’s available, and don’t assume your current insurer has your best interests at heart.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read what to do after a property disaster: the Aussie claim filing guide.
Sources and Further Reading
Understanding excess in your property insurance policy — A deeper look at how your excess choice affects your premium and when it makes sense to adjust it.
How to choose the right insurance for your waterfront property — Specific guidance for homes in high-risk coastal and flood-prone areas.
Canstar (2026). Home and Contents Insurance Cost. 🔗
Choice (2026). The home insurers with the biggest annual price hikes. 🔗
