Home insurance in Victoria (Vic)

Compare the Market customers in Vic received an average premium quote of $1,675 a year for home and contents insurance. The average annual premium quotes were $1,350 for home building insurance and $402 for contents insurance.²

While this provides a useful benchmark, the amount you pay may be higher or lower based on your property’s exposure to flood or bushfire risk, local crime rates and the level of cover you choose. Because premiums can vary significantly from one property to another, it’s important to compare policies before you buy to find suitable cover at a competitive price.

Compare the Market can help you see a range of policies side by side so you can find a policy and price that suit your needs.

Home insurance premiums in Vic are influenced by a range of factors, including your property’s location, exposure to flood and bushfire risk, the amount you’re insured for and the level of cover and excess you choose.

The impact of these factors will vary between insurers and properties, which is why the cost of cover can also differ significantly from one home to another.

Here are some of the main factors that can affect your premium in Vic.

Where you live

Insurers assess local risks when calculating premiums. Homes in areas with a higher likelihood of natural disasters such as bushfires, cyclones and floods may cost more to insure than similar properties in lower-risk locations. In Vic, this can mean significant differences between metropolitan, regional and rural areas.

Flood exposure

Vic has experienced several major flood events in recent years, including significant flooding in 2011, 2016 and 2022. The 2022 floods alone impacted 81% of local government areas across the state, particularly in Northern Vic and the Maribyrnong river catchment. Many councils across Vic maintain flood overlays to identify areas at a higher risk of flooding. If your property falls within one of these, such as in parts of Shepparton, Mooroopna, Wangaratta and Traralgon, you may have to pay more for home insurance than someone in a lower-risk area.

Bushfire risk

Your bushfire attack level (BAL) rating is one of the biggest factors insurers may consider when assessing risk. Homes with higher BAL ratings attract higher premiums, and some insurers won’t cover homes with a BAL rating of BAL-40 or BAL-FZ (flame zone) at all. Factors such as surrounding vegetation, distance to the nearest fire station and access to local emergency services may also influence the cost of cover.

Local crime rates

Data from the Crime Statistics Agency shows residential aggravated burglaries, including malicious damage, remain a concern across parts of Victoria. Melbourne LGAs, particularly Latrobe, Yarra and Port Phillip have some of the highest numbers of residential burglary and thefts in the state. If you live in an area with a higher risk of break-ins, you may pay more for home insurance.

The level of cover and excess you choose

Home building insurance generally costs more than contents insurance, and a combined home and contents insurance policy generally costs more than either standalone option. If you add optional cover to your policy, this will increase your premium. Choosing a higher excess may reduce your premium, but make sure you’re comfortable paying that amount if you need to make a claim. Extra event or location-based excesses for flood or bushfire may also apply if your property sits in a high-risk zone.

Your sum insured

The higher your building sum insured, the higher your premium is likely to be. Your sum insured should reflect the cost of rebuilding your home and any permanent structures on the property. If your home has a higher Bushfire Attack Level rating, you may need a higher sum insured to account for increased rebuilding costs and stricter construction requirements; otherwise you risk underinsurance.

Your claims history

Frequent claims signal a higher risk to insurers and may increase the cost of your policy when it’s renewed.

There isn’t one home insurance policy that’s the cheapest for every Victorian. Premiums are based on a range of factors, including where you live, the type of property you own, the level of cover you choose and your claims history. As a result, the option that looks the cheapest for one household may not be the cheapest for another.

The best way to find a competitively priced policy is to compare your options and make sure you’re only paying for the cover you need.

Make sure you read the Product Disclosure Statement and key fact sheet so that you know exactly what is and isn’t covered. The Target Market Determination could also guide you on whether a product is suitable for you.

You can compare policies, choose a higher excess and take steps to reduce the risk of bushfire, flood and theft damage to your home.

Here are some ways to potentially bring down your home insurance premiums:

• Reduce bushfire risk around your home: If a property is built to a higher Bushfire Attack Level standard, bushfire resilience may already be part of the home’s design, which insurers generally view favourably when calculating premiums. Some insurers may also offer discounts for homes that have improved their bushfire resilience. For example, the Bushfire Resilience Rating app can help homeowners assess a property’s vulnerability to bushfires using a star-rating system. The higher the bushfire resilience rating, the lower the insurance premiums could be.
• Manage your flood risk: A property’s flood risk can affect both the cover you need and the cost of that cover. While there is no guarantee that flood-resilience property improvements will lower your premiums, it may be worth discussing them with your insurer. Measures such as using water-resistant materials, raised floor levels and barriers that keep flood waters out of the property can help limit some of the flood damage and repair costs.
• Reduce the risk of theft: Break-ins remain a real household risk in Vic. Australian Bureau of Statistics data shows around 1.9% of Victorian households (51,700) experienced a break-in in 2023–25. Improving locks, securing doors and windows and adding security measures may reduce your home’s risk and could lower your premiums accordingly.
• Consider a higher excess: A higher excess can reduce your premium because you agree to pay more towards a claim. Choose an amount you could comfortably afford if you suddenly needed to claim after a storm, fire, flood or theft.
• Keep your sum insured accurate: Review your sum insured regularly, particularly if you’ve renovated or added features such as a new roof, garage, solar panel or security system, or updated plumbing or electrical wiring. Features that reduce the risk of theft, storm or water damage may be looked upon favourably by some insurers. If you live in an apartment, you may only need contents insurance, as the building itself is often covered by the strata insurance or body corporate insurance.

Home insurance in Vic covers your home, your belongings or both against a range of insured events. Whether you live in your home, rent or own an investment property, there are different types of cover available to suit your situation.

Depending on your policy, cover may include damage to your building, contents or both resulting from the following insured events:

• storm and rainwater damage
• fire and smoke damage
• theft or attempted theft, vandalism or malicious damage
• escape of liquid causing damage
• lightning damage
• explosion damage
• earthquake or tsunami damage
• breakage of glass causing damage.

Additionally, you may be able to add some or all of the following optional covers to your policy for an extra cost.

Building optional extras

• flood damage
• accidental damage
• motor burnout of electrical appliances causing damage
• temporary accommodation and removal of debris after severe weather
• accidental damage
• loss of rent/rent default

Contents optional extras

• loss of or damage to portable contents and personal effects like mobile phones
• damage occurring while your contents are in commercial storage

Always read the relevant Product Disclosure Statement for any insurance policy you’re considering for full details on inclusions, exclusions and annual limits. The Target Market Determination could also guide you on whether a product is right for you.

There is no single ‘best’ home insurance provider in Vic, as the choice depends on where you live and the risks your property faces. Whether that’s bushfire, flood, storms or theft, your policy should cover the risks most relevant to your area.

If you live in bushfire-prone areas such as the Yarra Ranges, East Gippsland or the Macedon Ranges, you may want to compare cover for bushfires, storms and the cost of rebuilding to current Bushfire Attack Level requirements. If you live in flood-prone areas such as Shepparton, Geelong, Rochester and Wangaratta, you may want to compare flood cover, excess levels and any policy exclusions that apply to flood-related claims.

Before choosing a policy, check which insured events are covered, whether optional cover such as flood is available, and whether your sum insured is enough to rebuild your home at current construction costs.

Most home insurance policies in Vic cover bushfire damage as a standard inclusion. However, your area’s perceived bushfire risk could affect the cost of your insurance premiums. For example, homes with combustible cladding in high-risk Bushfire Attack Level (BAL) zones may be subject to coverage limits or may not be covered at all. The higher the BAL rating, the higher the insurance premiums on the property are likely to be.

It’s also important to check your policy carefully. Heat-related damage such as scorching or melting, and in some cases smoke, ash or soot damage, is generally not covered. Some insurers may also apply exclusions, limits or waiting periods to bushfire-related claims. If you live in a higher risk area, review your building sum insured regularly to ensure it reflects current rebuilding costs and your property’s BAL requirements.

If you’re underinsured, your insurance payout may not cover the full cost of rebuilding your home or replacing your belongings after a bushfire, flood, theft or other insured event. This could leave you paying thousands of dollars, or potentially more, towards the shortfall yourself.

This can be particularly important in Vic, where bushfire and flood risks are often underestimated. Victorian homes in bushfire- or flood-prone areas can face significant rebuilding costs after a disaster, and insufficient cover could leave you paying the shortfall yourself. According to the Victorian Government, only half of Victorians have enough cover to rebuild and refurnish their homes after a disaster, and just one in 5 can accurately estimate their rebuilding costs.

To reduce the risk of underinsurance, it’s worth reviewing your sum insured regularly. If you’re unsure how much cover you need, you can use online rebuilding cost calculators or speak with a builder or surveyor. If you compare quotes through Compare the Market, our calculator can help estimate your sum insured amount.

Flood insurance isn’t a compulsory home insurance inclusion in Vic, but many insurers will include it as part of their standard home insurance policies regardless. However, your area’s perceived flood risk may affect the cost of your premiums.