Across Australia, homeowners are opening their renewal notices and discovering premium increases of 50%, 100%. In some cases more than 300%. While insurers point to risk modelling, natural disaster exposure, and inflation, many consumers are left confused and frustrated.
Recent determinations published by the Australian Financial Complaints Authority (AFCA) reveal a clear pattern: most sudden premium increases are not technically breaches of the law and AFCA rarely intervenes.
These real cases highlight something important: Home insurance is becoming more complex, more technical, and harder for everyday Australians to navigate without a broker.
CASE 1: A 300% Premium Increase Still Considered Lawful
One homeowner saw his premium jump 308% in a single year and believed it was "price gouging." AFCA sided with the insurer after they proved the increase resulted from factors including:
- Removal of a significant no-claim or loyalty discount.
- The implementation of a new, updated pricing model.
- Property-specific risk factors that outweighed comparisons to neighbouring properties.
Key takeaway: Even extremely large increases can be legally valid, depending entirely on the insurer’s risk data and proprietary pricing models.
CASE 2: Bushfire Risk Drives a 62% Increase Upheld by AFCA
A landlord disputed a 62% rise, calling it unfair and “predatory.” The insurer explained:
- The property had significant surrounding vegetation
- Embers can travel up to 500 metres, impacting risk
- Bushfire vulnerability modelling had changed
AFCA agreed the insurer had explained the basis sufficiently.
Key takeaway: You do not need a specific local bushfire event for premiums to rise. Risk modelling alone can justify an increase.
CASE 3: "Overcharging" on Full-Replacement Policies Not Improper
A customer argued she had been overcharged because QBE did not disclose the internal rebuild cost estimates used for her full-replacement cover. AFCA consistently finds that:
- Insurers are not legally obliged to disclose every internal pricing factor (premium algorithms, underwriting inputs).
- Some inputs are deemed commercially sensitive.
Consumers cannot access or challenge all the technical, commercially sensitive factors driving their final premium.
CASE 4: Long-Term Indexation Can Lead to Overinsurance
A long-term customer complained that automatic indexation applied by an insurer (Hollard) had pushed his sum insured too high over many years. While the insurer's renewal process was legally sufficient, AFCA's findings highlight:
- Renewal notices showing the final premium and cover were legally sufficient disclosure.
- Loyalty does not protect homeowners from overinsurance or premium creep. Indexation, even when based on standard industry rates, is something the homeowner is responsible for checking against their current, actual rebuild value.
CASE 5: “I Never Received the Renewal Notice”, AFCA Still Sided With the Insurer
A customer said he never saw the renewal email and argued the insurer had not met its obligations.
- Evidence showed the email was sent
- Even if it landed in junk mail, it still counts as delivered
- Insurers are not required to prove the customer read the notice
Email delivery, not receipt, satisfies renewal obligations.
What These Cases Reveal About Insurance
Across all rulings, AFCA consistently reinforces the following facts about the Australian insurance market:
- Insurers do not need to disclose every pricing factor: Premium algorithms, disaster modelling, and underwriting inputs are confidential commercial information.
- Large premium increases are not automatically unlawful: What feels unfair to a consumer may still meet legal and regulatory standards.
- The system is not built for individual negotiation: AFCA cannot force insurers to change pricing, only to correct procedural errors or breaches of the law/Code of Practice.
Why Your Broker is Essential in Today's Home Insurance Market
While AFCA rulings highlight the limits of consumer protection, they also emphasise the growing necessity of using an insurance broker:
A Solution to Premium Hikes
In a market where premiums can jump overnight, and AFCA may not intervene, having a broker isn't a luxury. It is your best way to understand your policy, compare alternatives, and avoid unnecessary costs.
Contact us today for a comprehensive review of your home or property insurance. As an insurance broker in Sydney, Australia, specialising in business, property, and liability insurance, we understand the local risks that drive these national trends.
Call Tank Insurance on 02 9000 1155 or request a quote to get started.
