Victorian Insurance Premiums Spike Amidst Industry Turbulence

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Michael Keynes, a spokesperson for VMIA, stated that the raises, which see premiums leaping by an average of 53%, are a necessary measure to accommodate the recent flood of claims. "A record number of domestic building insurance claims have been resolved over the past year." Since July 1, the insurer has settled over 4000 claims.

Specifically, premiums for new single and multi-unit constructions will surge by 65%, while structural and non-structural renovations along with swimming pools will face a 20% rise. The charges for owner-builders are also set to increase by 65%.

Keynes attributes this spike to several intersecting issues: "We are dealing with the compounded effects of builder insolvencies, high inflation, and an ongoing shortage of skilled workers, all of which drive up building costs. As a result, VMIA needs to adjust premiums to ensure continued protection for homeowners when builders can't complete or rectify constructions."

In response, industry watchdogs, such as the Housing Industry Association (HIA), have been vocal about their objections. Keith Ryan, the executive director of HIA Victoria, warned that these increased premiums will further dent housing affordability in the state. "Victorian home builders and their clients are already grappling with soaring costs. This increase is an additional burden which hits new homebuyers the hardest," Ryan said in a statement.

The new premiums add to the already heavy financial load confronting new home buyers. "In Melbourne, nearly half of the cost of a new house and land package is swallowed up by taxes, fees, and related charges - effectively putting homeownership out of reach for many Victorians," Ryan elaborated.

Ryan also expressed disappointment that higher premiums were not coupled with enhanced insurance benefits for homeowners. He cautioned that builders, already stretched by increased material and labor costs, will ultimately pass these added expenses on to customers.

While premium hikes are aimed at safeguarding homeowners in these turbulent times, it’s clear that the cascading costs and their effects on housing affordability will spark further debate. This article incorporates information originally reported by insuranceNEWS.com.au.

Published:Monday, 17th Jun 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Introducing Backd: Affordable Insurance for Casual and Contract Workers

15 Mar 2026: Paige Estritori

In a significant move to address the insurance needs of Australia's growing casual and contract workforce, TAL has partnered with global insurtech company Cover Genius to launch Backd. This innovative digital-only insurance product aims to provide accessible and affordable life and income protection coverage to workers who have traditionally faced challenges in obtaining such protection. - read more

Zurich's Home Loan Protection: Tailored Insurance for Mortgage Holders

15 Mar 2026: Paige Estritori

Zurich has unveiled its Home Loan Protection (HLP) product, a new insurance offering that combines life and income protection benefits tailored specifically for mortgage holders. This innovative cover automatically adjusts its premiums as the insured's mortgage balance decreases, ensuring that policyholders are only paying for the coverage they need. - read more

Australian General Insurance Premiums Set to Surpass $144 Billion by 2029

15 Mar 2026: Paige Estritori

The Australian general insurance industry is on a trajectory for substantial growth, with direct written premiums (DWP) projected to exceed $144 billion by 2029. This forecast, provided by data and analytics firm GlobalData, reflects a compound annual growth rate (CAGR) driven by increasing demand for coverage in response to the rising frequency of natural disasters. - read more

Australia's A&H Insurance Sector Set for Steady Growth

15 Mar 2026: Paige Estritori

Australia's accident and health (A&H) insurance sector is on track for significant growth, with projections indicating an annual increase exceeding 4% through to 2030. This positive outlook is largely attributed to advancements in digital distribution channels and escalating health-related expenses. - read more

ASIC Probes Transparency in Motor Insurance Pricing Practices

15 Mar 2026: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has initiated a comprehensive review into the accuracy and transparency of motor insurance pricing practices. This move aims to ensure that insurers are adhering to legal disclosure requirements and providing clear information to consumers. - read more

Click for more Insurance News