Cheapest Home Insurance

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, updated on March 6th, 2024       

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Finding an insurance policy to cover your home and/or contents is one of the first choices you’ll have to make after buying your home; in most cases, it’s a non-negotiable with your insurer. If you don’t have a choice about buying it, then, why not try to find the best home insurance deal on offer? Fortunately, there are many ways you can look to cut down on your insurance premium rate that can save you hundreds over a short period. In this comprehensive guide, we unpack home insurance and the ways you can optimise your deal to pay the cheapest premiums.

How do I reduce my premiums so I can access the cheapest home insurance?

There are several key areas homeowners can look to address when searching for the cheapest home insurance policies on the market. Take a look at some of the pointers below as a guide to how you should approach the home insurance process with a view to minimising your outlay.

Know what insurance you need

There are three main types of home insurance that you’ll have to know about when researching the cheapest home insurance: building insurance, contents insurance and home and contents insurance. These all vary in price, with contents insurance representing the cheapest average monthly payment of between $30-$50 per month and building insurance generally costing not much over $100 monthly. These costs will vary depending on the size, type and location of your property, however. It’s important that you don’t simply look to the cost when buying insurance, though: you have to cover yourself for what you need, which could mean that you end up paying less or more depending on your own personal situation.

If you’re in the same position as most people looking to take out an insurance policy on their home, you’re probably living in the house you own. In this position, you should take out a home and contents insurance policy to cover damage sustained to both your property and your belongings. This is generally the most expensive type of insurance given that it’s a combination of both building and contents insurance, albeit often cheaper than buying those policies individually. However, because it’ll provide you with the most coverage across the board, it’s a worthwhile financial responsibility to take on. That doesn’t mean you shouldn’t still compare the best prices, though, as there’ll be plenty of opportunities for you to save money on even the most expensive types of home insurance.

Shop around for better deals each year

What you may not be aware of is the fact that some insurance companies will actually increase premiums for long-time customers, rather than reduce them to encourage and reward loyalty. You should look to avoid this at all costs, and one way of doing so is surveying the market each year when the time comes to renew your insurance. You should take the cost of the premiums your current insurer is offering you and compare that with a collection of quotes from other providers you’ve gathered to help determine which one to go with.

You can also use this method to determine the bang for your buck that you’ll be receiving in terms of coverage for each policy. As previously mentioned, the cost of your insurance is only part of the insurance package: coverage is just as important, if not more so. Shopping around will ensure that you avoid a gradually creeping premium rate with the same insurer over a number of years and keep your premiums fresh throughout your home ownership.

Build up a strong history of avoiding claims

One of the most appealing traits a customer can have to an insurer is a tendency to avoid making claims. Each claim you make over the course of your time as an insurance receiver will be recorded and taken into account when your renewal rolls around. Someone who doesn’t make claims is obviously an easier customer to insure than someone who is constantly making claims for damage to their property, so insurers want to entice as many “safe” customers as possible.

This certainly doesn’t mean that, even if the damage your home sustains is significant and very costly, you shouldn’t make claims at all. If there’s a need for you to make a claim, you should do so; that’s what the insurance service you’re paying for is there to do, after all. This and other factors like a no claims discount (NCD) are designed to encourage greater safety around your home that would reduce the risk of making a claim and cost your insurer money. This could mean that in a scenario where your property or possession/s are damaged and cost an amount to repair that is small enough for you to comfortably do so yourself, it might be worth doing so to preserve a claim-free record.

Expand the excess on your insurance policy

Your excess represents the figure you’ll stand to pay out of pocket when you make an insurance claim, so it’s an important number to consider for your policy. However, what you may not know is that it has a direct impact on the cost of your premiums.

This is because your excess forms a percentage of the total cost of repairing or replacing property or contents. Therefore, the greater the percentage of the repair cost is out of your pocket, the lower the percentage comes from your insurer. The lower amount that your insurer is now covering you for is reflected in the reduction in the cost of premiums.

Expand your home security

Anything that can lower the risk of damage to your home or belongings will be a big tick in the eyes of your insurer, no matter how big or small. An overall increase in the security systems present in your home can make a big difference to what you’ll be paying in premiums, so if you’re able to take strides in that area you can reap the rewards.

Examples of developments you can make to your home that could cut down on the cost of your premiums include increased or additional alarm systems, security cameras, bolts or locks on doors and windows and taller, sturdier and less penetrable gates and fences.

Consider the area you’ve bought into, or are buying into

In every city or town, there’ll be areas that insurers will consider at greater risk of sustaining damage. This may be due to a greater crime rate or an increased vulnerability to extreme weather such as bushfires or flooding. If your property is deemed at any level of risk due to either of these factors or others, your premiums will rise to compensate for the increased likelihood of damage.

If you’re looking for a practical example of how much these external influences can impact the cost of premiums, look no further than North Queensland. Constantly stricken by storms and cyclones, home insurance premiums in the north east of Australia can cost more than double or triple the national average. Homeowners in this area suffer financially as a result of the extreme weather, so bear that in mind if you’re looking to move there!

Pay your premiums annually

Reducing the rate of your insurance premium payments from monthly to annually can help you save money each year. This is because the processing of premium payments incurs a service or administrative fee each time they’re made. Reducing your payments per year from 12 to one will greatly reduce the effort required on the part of your insurer to process the funds.

However, the drawback to this is paying your entire premium in one lump sum rather than in more manageable bites, which may not be feasible for your financial situation. Even cutting it down to bi- or tri-annual payments can make a difference and save you some handy funds.

Is it in the policy or is it an optional extra?

Optional extras can be a great way for you to expand the coverage you receive for your home insurance policy, but you must be wary of the fact that these will increase the cost of your premiums. For example, if you’re looking to add coverage for accidental damage or motor burnout, it’s probably going to cost you.

There are ways around some optional extras, though, as each insurer is different when it comes to the areas they cover. You might find that some insurers include certain coverage in their main policies, while others will only list them as optional extras. If these come at a cheaper rate overall, you might find yourself a great deal with coverage in the areas you need.

How much can I save when buying the cheapest home insurance?

This depends on the type of insurance you’re looking for and the level of coverage you’re after. To cite an example used earlier, home and contents insurance will always be more expensive than building or contents insurance policies individually, but it’s not entirely fair to compare the two as they are given the difference in coverage you’ll receive. For a calculation on how much you could save with different home insurance premiums, we’ve put together the table below.

Premium cost Premium cost Total paid over 12 months Annual saving

$130

N/A
$1,560

N/A

$125

$5
$1,500

$60

$115

$15
$1,380

$180

$100

$30

$1,200

$360

$80

$50

$960

$600

$55

$75

$660

$900

It’s once again important to note, though, that the cheapest home insurance isn’t always the best. You’ll want to look for a policy that’s manageable financially, of course, but you should be looking for those which can cover you in the areas that you need. For instance, there’s no use taking out a cheap building insurance policy that doesn’t cover you for flood damage if you live in an area readily affected by flooding.

Any other questions about the cheapest home insurance?

Will valuing my belongings at a lower cost help me receive the cheapest home insurance premiums?

Yes – but you should understand the risks associated with that too. In the same way as increasing your excess, lowering the amount you’re insured for will indeed lower your premiums. Undervaluing possessions or property, however, can likely lead to under insurance if you end up having to make a claim. We always recommend valuing aspects of your home and contents insurance as accurately as possible to ensure you’re not caught out.

Which is the cheapest: sum insured cover or total replacement cover?

Sum insured cover is typically the cheapest cover you can take out on your home insurance policy. This covers you for a pre-determined amount set by you and your insurer, meaning that it may not necessarily cover you for the entire cost of damage. Total replacement cover does this but will be a more expensive addition to your home insurance policy.

Is it cheapest to buy individual building and contents policies or take out one home insurance policy?

Usually, you’ll save money when going with a multi-policy deal. These can come with discounts for combining policies into one and may also save you on administrative fees. Another advantage policies of this nature carry is that you’ll be making one lot of payments, rather than two on potentially different cycles. You may find that it’s more affordable to separate your building and contents insurance policies, though, so it depends on the deals you can find.

Will I still be able to access the cheapest landlord insurance with a greater number of tenants?

Probably not – you may find that with a greater number of tenants, particularly those that pose more of a threat of damage like children or pets, your premiums will rise in equal measure. Insurance premiums are calculated based around your overall likelihood of making claims and many insurers will see tenants as upping your risk, as it’s inherently less safe to entrust a home to someone else when compared to yourself. This is particularly the case when they’re not responsible for insuring it or paying for repairs.

Will cover in areas I may not need, help me with the cheapest home insurance?

No – adding cover will almost always increase your insurance premiums, so be careful about the types of cover you choose to add. For example, if you live in an area with no chance of flooding, it may not be worth the extra cost for covering an unlikely eventuality. It’s important to note that opting out of certain coverage areas included in your policy won’t necessarily reduce the cost, so in those cases it might just be worth holding onto them.

Will buying my home insurance online help me receive the cheapest policy?

Potentially – some insurers will offer premium discounts when you buy online. This is usually only for the first year or so, though, so calculate whether this short-term discount is worth your business over another insurer with an overall more affordable deal.

What’s the cheapest home insurance for me if I’m a landlord?

Landlord insurance is the most appropriate form of insurance policy if you’re a property investor, as it covers you in landlord-specific areas like loss of rental income, break of lease or damage caused by tenants. Generally, this most closely resembles building insurance. Landlord insurance is a great alternative for reducing the cost of your premiums, as it avoids property owners in this position having to pay for coverage in areas that they don’t need, such as for contents insurance in an unfurnished home. Cheap landlord contents insurance does exist for those renting out furnished homes, though.

If I’m renting, how do I save on home insurance and access the cheapest premiums?

Renters’ insurance is more or less a standard contents insurance policy, which is the cheapest type of home insurance on the market. This is because renters have no need to cover the cost of repairing damaged property, as they hold no ownership of it. In this way, it’s a great way for renters to access the cheapest premiums by not having to pay for the most expensive aspects of home insurance and focus their attention on looking after their important belongings at a far l