Australian home insurance premiums boosted a lot in two decades in the last year, led by weather transformation and destructive events and higher building costs, fresh research revealed. Median home insurance premiums surged 28 per cent to A$1,894 (S$1,700) in the year to March 31, according to a report revealed on Monday by the Actuaries Institute. Premiums for the most-prone to danger elements – such as those in flood- or bushfire-prone areas – shot up 50 per cent, it revealed.
The number of “affordability stressed” households – those splurging exceeding than one month’s worth of their gross yearly financial outcome on home insurance – raised to 1.24 million from one million households a year ago, with the overall proportion climbing to 12 per cent from 10 per cent. On average, those households splurged 8.8 weeks of their income on home insurance. The fresh information comes as many Australian households are already struggling with elevated inflation, raising borrowing costs or raising rents. “Half the increase in home insurance premiums relates to building cost inflation, which has raised during the past two years due to supply chain shortages,” said Mr Sharanjit Paddam, one of the report’s authors.
“There’s also been a raise in natural catastrophic events happening and higher reinsurance costs, led by the climate transformation affects we’re already noticing.” The most affected households are prone to floods in Northern Rivers region of New South Wales, also in north Queensland and Western Australia, where cyclone danger is too much, the research revealed. Intense weather destructive events are happening more frequently across the globe, with climate scientists giving a warning bell that one-in-100-year disasters will happen more frequently unless carbon emissions are cut down immensely.