1 in 5 Australians switch home insurance to save costs

Alarmingly, 3% downgraded or dropped their policy completely.

About 20% of Australians who have home insurance have switched their policy in the past two years in order to financially save on expenses.

In a finder survey of 1,071 respondents, 636 were revealed to be owners of home insurance. Of those who have insurance, 9% sought better coverage. Alarmingly, 3% dropped or downgraded their policy, leaving nearly 370,000 Australians financially vulnerable in case of disaster.

The survey found that 47% of policyholders auto-renewed their plans, potentially missing out on significant savings. This is notable as 68% of Australians reported an increase in their home and contents insurance premiums in the past year.

Tim Bennett, an insurance expert at Finder, highlighted the tough choices Australians face between maintaining coverage and managing other expenses. 

He warned that dropping insurance could lead to financial devastation if accidents or weather-related damages occur. 

The median home and contents insurance premium has risen by over 19% in the last year, reaching a record high of $2,434. 

Bennett emphasised that despite the cost, home insurance provides crucial financial protection. He advised against automatic renewals, suggesting that shopping around for better deals could lead to significant savings, as illustrated by a $2,865 difference between the cheapest and most expensive annual policies for homes valued at $600,000.

"The family home is the largest financial asset for many Australians, so insurance must not be overlooked,” Bennett concluded.