According to new findings from financial comparison platform Mozo, many Australian homeowners may be missing out on considerable savings by staying loyal to their current home and contents insurers.
Despite an increase in premium costs nationwide, Mozo’s latest report highlighted that a large number of policyholders express satisfaction with their insurers, a phenomenon that Mozo labels the “Policy Paradox.”
The report estimates that Australians could save an average of $870 per year by exploring more affordable insurance options – highlighting insurance brokers’ role in securing better deals.
The research, which involved analysis of over 160,000 insurance quotes and survey feedback from more than 1,200 Australians, indicated that customer satisfaction often leads to reduced comparison shopping.
Mozo found that 43% of respondents were content with their existing insurer; however, of those satisfied customers, about one in three said they rarely or never reviewed other policies.
Rachel Wastell, Mozo’s personal finance expert, remarked that this trend could mean many Australians are missing out on potential savings simply due to “blind loyalty.”
“With home and contents premiums jumping $288 on average in the past year, the price of not reviewing a policy is becoming more and more expensive. If you’re happy with your current provider, that’s great, but if you’re not shopping around you could be blind to potential savings,” she said.
Mozo’s report indicated that average annual home and contents insurance premiums have reached $3,499 across Australia, reflecting a 9% rise over the previous year.
Geographic factors remain a significant influence on premiums, with South Australia being the most affordable state for insurance, averaging $2,053, while Queensland and the Northern Territory report the highest annual premiums, at $4,398 and $4,547, respectively. These elevated costs are linked to the heightened risk of natural disasters in those regions.
Besides location, other factors impacting insurance premiums include construction materials and property values. For instance, concrete homes carry the highest average premium at $4,506, while double-brick properties tend to be more affordable, averaging $2,932.
Homes valued above $800,000 generally incur premiums over $4,800 annually, reflecting higher insurance costs for high-value properties.
The Mozo study also sheds light on reasons that may prevent Australians from switching insurers, including the perceived complexity of the process, doubts about new providers, and concerns about potential reductions in coverage.
Wastell pointed out that, although many insurers now offer easier sign-up processes and discounts for new customers, consumer hesitation persists.
“Insurance is often overlooked until it’s time to renew or when something unfortunate happens –but those who take a proactive approach are typically rewarded with real savings,” she said.
Adding to the discussion, consumer advocacy group CHOICE recently reviewed over 50 home and contents insurance policies and found that several may not offer sufficient value for consumers.
CHOICE insurance expert Daniel Graham said that certain policies lacked adequate coverage in areas such as key inclusions, pricing, and exclusions, potentially leaving some homeowners with insufficient protection.
Mozo recommended a few strategies that brokers should consider when assisting clients in seeking good deals:
Mozo also suggested considering non-traditional insurers because they could offer competitive and high-quality coverage, expanding options beyond well-known insurers.
