Big jump in premium for building insurance

[annmak]

I have building insurance with westpac for my IP for 14 years and have never claimed anything. The house is over 50 years old, only two bed. Last year the total premium is 772.87 and this year it has been increased to 982!!!

Just want to ask is it normal to have such a great increase without any specific reason?

I am thinking of switching companies but find it very difficult to do so as I am now staying overseas. Will it be easier if I seek help from an insurance broker? Any recommendation?

 

[brettc]

I have building insurance with westpac for my IP for 14 years and have never claimed anything. The house is over 50 years old, only two bed. Last year the total premium is 772.87 and this year it has been increased to 982!!!

Just want to ask is it normal to have such a great increase without any specific reason?

I am thinking of switching companies but find it very difficult to do so as I am now staying overseas. Will it be easier if I seek help from an insurance broker? Any recommendation?

Unfortunately premiums have risen across the board for building & contents insurance, due largely to the spate of natural disasters across Australia in recent years, which has led to (among other things) increases in reinsurance costs which need to be passed on to the insured.

Insurance does work by spreadiing risk across the board so that, so that even if you haven't claimed yourself, there can certainly be a flow on effect. Some specific areas have increased by massive amounts however, particularly flood prone areas. Increases of up to 1500% are not unheard of in some areas, but that's when yolu really want to shop around, because different insurers may rate the area differently.

That doesn't mean you shouldn't shop around, but I would stress VERY STRONGLY - when it comes to insurance (like most things), "value" is important, but far more important is ensuring the policy will cover the risks you are exposed to without ridiculous conditions and excesses. "Cheap" doesn't necessarily mean "value".

 

[annmak]

Fire service levy

Just find that the premium includes $125 for fire service levy. How essential is this? Is it worth skipping this?

 

[Aaron_C]

Just find that the premium includes $125 for fire service levy. How essential is this? Is it worth skipping this?

I think that relates to a change in legislation. Last time the fire levy as included in your council rates but now it is a separate insurance thing from memory.

 

[marty998]

I don't think you can get out of paying the fire services levy. At least not in NSW. It's silly to have it on insurance contracts because the uninsured don't pay it and therefore don't contribute to it.

The worst thing is that stamp duty is calculated on the premium + the levy. Then GST is calculated on the combined total. A tax on a tax on a tax!!!

 

[DaveM]

Unfortunately premiums have risen across the board for building & contents insurance, due largely to the spate of natural disasters across Australia in recent years, which has led to (among other things) increases in reinsurance costs which need to be passed on to the insured.

Hey Brett

Is the EBM/Rentcover online quoting system overly conservative on insurance these days because of it? I have done a few quotes recently on some general properties in non risk areas (eg no flood etc) and each time it says that the property requires further details and needs you to call up the call centre.

Other insurers do online quotes for the same property, so just wondering why the EBM quoter doesnt like them?

 

[Scott No Mates]

I am thinking of switching companies but find it very difficult to do so as I am now staying overseas. Will it be easier if I seek help from an insurance broker? Any recommendation?

Assuming that the property is residential, using a broker won't save you anything although they do have a much greater pool of insurers that they deal with, so you could come up trumps.