How much should insurance go up each year?

[wish-ga]

Insurance for a block of units (I own only one) in Sydney. Is there a percentage? Ratio of property growth? Or something I should already know.

Just got correspondence from bc manager. Do we want to go with the agree amount or add to it?

Not sure how often it should go up?

Thanks in advance

 

[Mr. Fabulous]

It *should* go up as much as the market is willing to pay, in order to maximise return to the insurer. But yes, premiums generally increase every 12 months.

 

[Propertunity]

Insurance for a block of units (I own only one) in Sydney. Is there a percentage? Ratio of property growth? Or something I should already know.

Insurance premiums are a factor of:
1. Increase in the costs of labour & materials etc to rebuild/fix
2. Claim history - i.e. are YOU a good risk
3. Postcode claim history - your neighbourhood
4. The insurer's financial position
5. Their re-insurance premiums that they pay to off-load some of their risk
6. The insurer's position in the market and where they want to be placed i.e. are they already the cheapest and can/will the market bear a price increase?
7. The whims of the board

I'm sure there are more factors but only one of the points above has anything to do with CPI.

*edit* Having just re-read the OPs Q, I suspect Mark & I have answered the Q: "How much should insurance premiums go up each year?"
I suspect the Q may have been: "How much should insurance cover go up each year?"

If the latter, then increase cover to cover the risk. Most insurers, if they have insured a block of units for $4M say, will automatically offer a cover of say $4.2M next year etc. I'd be inclined to go with the automatic indexing that they offer.

 

[wish-ga]

Thanks so much for all this information. I will recommend to our exec that the premium increase.