It’s a common question many policyholders ask: “Why has my insurance premium increased when I haven’t made a claim?” While it may seem frustrating, there are several valid reasons why insurance premiums go up over time. 

Understanding these factors can help you feel more in control and highlight the value of working with your insurance broker or adviser to stay properly protected without overpaying.

Insurance premiums are calculated based on risk. As circumstances change over time, so does your risk profile. Even if your personal situation hasn’t changed, external factors—like inflation, rising repair or construction costs, and increased claims across the industry—can drive premiums up. For example, if natural disasters like floods or bushfires become more frequent or severe, insurers adjust their pricing to reflect this greater risk. Similarly, if motor vehicle parts and labour costs rise, or if thefts become more common in your area, insurers may raise premiums to cover the higher likelihood or cost of future claims.

Another reason is the influence of reinsurance. Insurers themselves are insured by larger global companies (reinsurers). When reinsurers face global losses, such as from major weather events or financial downturns, they may increase the costs they charge local insurers—costs that are then passed on to policyholders.

Personal circumstances can also impact your premium. Have you renovated your home, purchased expensive items, or added a teenage driver to your policy? These changes increase the value or risk associated with your policy and may lead to higher costs.

This is where working with an insurance broker or adviser becomes crucial. Rather than simply accepting increases year after year, a good broker or adviser will help you understand why the changes are occurring, check if your policy still suits your needs, and explore more cost-effective options. They can compare products from multiple insurers, ensure you’re not under- or over-insured, and help adjust your policy to reflect any changes in your lifestyle, property, or business.

Reviewing your insurance regularly ensures you’re still adequately protected and not paying for cover you don’t need. Your broker or adviser can help you make informed decisions, negotiate on your behalf, and even assist with claims if the time comes.

In short, premium increases are a normal part of the insurance cycle, but you don’t have to navigate them alone. Working closely with your broker or adviser can give you confidence, control, and peace of mind.

If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.

This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.

(Feedsy Exclusive)