A home insurance premium refers to the amount you pay your insurer to keep your policy active. You can often choose to pay your premium monthly, quarterly or annually.
The premium for your home insurance policy is calculated based on several factors, including but not limited to, frequency of payment, your choice of cover, the sum insured and your location.
The excess is the amount you’ll have to pay when the insurance company agrees to pay your claim; typically the higher the excess, the lower the premium and vice versa.
Speak to your insurer to see how much an increase in excess would lower your premium to help decide if this option suits you. You need to be sure you’re in the financial position to afford a higher excess if you ever need to make a claim.
The sum insured is an amount you choose, when you first take out a home insurance policy. The amount should reflect the cost of re-building your home and replacing your contents. It is usually shown on your Certificate of Insurance and the amount you choose can be updated at any time.
It’s important to regularly review your sum insured shown on your Certificate of Insurance, as your building or contents may have changed since you first took our your policy. You don’t want to overestimate your sum insured and therefore pay a higher premium, or underestimate the sum and leave yourself underinsured.
Use this handy building insurance calculator and contents insurance calculator to ensure you’re appropriately covered.
Some insurers offer discounts when you combine different types of cover under the one insurance policy.
For example, if you have building and contents cover on the one policy you may be eligible for a combined policy discount. Speak to your insurer to see if they can offer you a deal for combining cover.
Some insurers offer a discount when you purchase your policy online. Do your research and compare digital offers or ask your insurer what they can offer if you buy your policy online.
Things you should know
This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.
Home Insurance is provided and issued by Hollard Insurance Partners Limited ABN 96 067 524 216, AFSL 235030 (Hollard) and distributed by the Commonwealth Bank of Australia ABN 48 123 123 124, AFSL 234945 (CBA). Hollard is not part of the CBA Group. CBA and its related entities do not sell, issue or guarantee the obligations or performance of Hollard or the products Hollard offers and this insurance product does not represent a deposit with or liability of either CBA or any of its related bodies corporate. If you purchase a Home Insurance policy, CBA is paid a commission which is a percentage of your premium.
For products issued by Hollard, information about the target market can be found within the product’s Target Market Determination available here.
This information has been prepared without considering your objectives, financial situation or needs. You should, before acting on this, consider the appropriateness of the product to your circumstances. A Product Disclosure Statement (PDS) is available at all Commonwealth Bank branches, by downloading them from commbank.com.au or by calling 13 2423 and should be considered before making any decisions about this product. You should also read the Premium, Excess and Discount Guide (PEDG), Key Facts Sheets (KFS), and Financial Services Guide (FSG) by clicking on the links, or by calling 13 2423 for a paper copy.
