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Ask Kochie: My insurance premium is up 80%! What can I do?

6 min read
25 Sep 2023
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At Compare the Market we’re passionate about helping you make better decisions with your money. Our Economic Director, David “Kochie” Koch is here to answer your real-world budgeting questions through the Ask Kochie series, to support you with the big issues impacting your budget.

Email your questions to [email protected]

Coming up:

  • My insurance premium is up 80%! What can I do?
  • Down the research rabbit hole
  • Softening the fall from the fixed-rate cliff

This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. All names have been changed for privacy.

My insurance premium is up 80%! What can I do?

Dear Kochie,

My home insurance has gone through the roof close to 80% more than last year, with flood cover annual premium is now $4700 with [my insurer]. I chose to delete flood cover and that was $2700. We do live in Hamilton (Newcastle). I admit I’m concerned about not being covered for flood. Any advice would be appreciated.


Hi Alice,

I’m sorry to hear that flood cover has become so expensive for you. This is a serious issue creating a great deal of stress for communities, especially in disaster-prone areas.

Having reported on some of Australia’s most devastating flood events, and met with so many heartbroken victims, I know it’s a nightmare to live with.

Recent wild weather events have seen premiums increase across Australia. We’ve also seen insurers account for the impact of climate change, and the increased risk of natural disasters, to ensure they are prepared for future claims.

On top of that, building material and labour supply shortages have caused the cost of repairs to surge.

It’s great that you have maintained some cover for your home and contents to provide cover for other risks like fires, storm damage and theft.

Just remember, if your policy doesn’t include flood coverage, you’ll need to personally cover any expenses arising from potential damages caused by flooding.

Don’t take any bill hikes lying down. If you shop around and look at other insurers, it may be possible to get a competitive deal on your home and contents that still includes flood cover, especially as different insurers weigh flood risk differently.

By comparing across all your bills and making savings elsewhere, you might be able to save enough to offset the cost of keeping flood cover. You might also consider flood resilience renovations. Although an upfront cost, they may protect your home or mitigate future flood damage.

No matter which policy you go with you always could weigh up increasing your excess within your financial means (which is what you need to pay in the event you make a claim). This is a quick way to help decrease your premium which could free up some cash to help afford flood cover.

Hope this helps with your considerations!



Down the research rabbit hole


Welcome to Compare the Market. My question is, with so many companies now offering comparisons and various offers in nearly every financial field, how do you distinguish the best value offer available?


Hi Paul,

Thanks for the warm welcome! I’m so excited to be part of an expert team working hard to help Australians save money on their bills.

As an old “finance nerd” and a big believer in the power of comparison, it’s the perfect fit for me!

One of the big deterrents for a lot of people when it comes to comparison is knowing where to start.

The great thing about services like Compare the Market is that you’ll find market-leading brands, as well as smaller brands you might not have considered before, all in one place. And in a matter of minutes, you can compare quotes that suit you side-by-side without opening multiple tabs.

Firstly, you’ll need to decide what is important to your personal circumstances.

It’s important to read the fine print and seek products that provide value for you because best value really does vary from person to person.

When comparing, you’ll want to make sure you’re comparing products with similar features to ensure you’re comparing apples to apples. And remember, for many products there are no lock in contracts, which means if you pick one today and find a better deal later, you can still switch.

When it comes to insurance, consider any coverage that you may need to add or remove as this will impact the price you pay, keeping in mind that what might cost you extra now, could save you more if the unexpected happens.

Once you’ve whittled your options down, you can take account of any sweeteners, like grocery discounts, movie vouchers and other offers.

Happy comparing!



Softening the fall from the fixed-rate cliff

Hi Kochie,

We are coming off a 1.88% fixed mortgage in December and we have a term deposit ending late November.

Should we put it on the mortgage or put it in our superannuation?



Hi Daniel,

It’s great to see you’re putting a plan in place to make sure you’re well-prepared to come off the fixed rate cliff.

The vast majority of Australians who locked in fixed rates during the pandemic will see them end during the next six months. It’s a good idea to get in front of this early to make sure your lender doesn’t roll you onto an expensive backbook rate.

The difference between some of the most competitive and most expensive interest rates could be thousands of dollars.

While I don’t have a full view of your financial situation, I want to delve into the key factors you should consider:

  1. What’s the size of you term deposit? If it’s a substantial sum, it might be a big help in reducing your mortgage repayments or bolstering your superannuation savings.  If you are considering contributing a significant sum to your super balance, you should seek advice on the relevant contribution caps and tax implications which could apply to you. This will help you get a full picture of the benefit you could realise from using the sum to offset your mortgage verses boosting your super balance.
  2. How close are you to retirement? Your choice of whether directing funds towards your mortgage or superannuation is better should align with your long-term financial goals. If you’re nearing retirement, focusing on superannuation might provide enhanced financial security during your post-work years but, if you will still be paying off your mortgage at retirement, you should consider whether you will be able to continue to meet the repayments. Conversely, if retirement is further down the road, strategically paying down your mortgage might offer a more immediate impact on your financial stability.
  3. How comfortable is your mortgage? Consider how comfortable you are with your current mortgage payments. If you’re managing well without financial strain and will be able to continue to meet your increased repayments in December without financial strain, this could give you more flexibility in your decision.
  4. Superannuation accessibility. While putting money into your superannuation can be a smart move for retirement planning, remember that it can often be quite hard to withdraw these funds. So, consider your immediate and long-term needs before making a decision.
  5. Why not both? Remember, if you can reduce your immediate mortgage payments, using the term deposit balance, you may be able to increase your personal pre-tax salary sacrifice into your super account. This could give you the best of both worlds.

For personalised advice that fits your situation, it’s a good idea to consult a financial advisor. They can help you navigate all the details and provide insights into your options.

Hope this helps.


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