Cost of living continues to climb and apps like WeMoney gives you a shortcut to saving money. In this post, learn why home insurance in Australia has increased and how you can save hundreds of dollars in 5 minutes on home insurance by using an app like WeMoney.
Please continue reading to learn why my home insurance increased 60% and how I saved over $500 using the WeMoney app. Or jump ahead using these handy links.
Why Home Insurance Has Increased
Cost of living continues to climb on smaller items, such as your weekly grocery shop. And it continues to climb whenever you pay your rent or mortgage. The next shoe to drop in the cost of living crisis is home insurance. Speaking to friends and relatives, I wasn’t the only one to feel the pinch of a 60% increase from last year. I couldn’t understand why it was 60%, so I called up my home insurance provider to understand what the heck is going on.
Why Did My Home Insurance Increase
After receiving my home insurance renewal with an unjustified 60% increase, I called my home insurance provider and they gave me two reasons for why home insurance has increased by in one year.
- The Economy
- Increased claims in my area
Let me go into the explanation.
The Economy:
The economy has taken a hit globally with dreaded supply chain issues, increases in energy and the skyrocketing cost of building materials. This means that the calculation for your insurance premium has increased. If something happens, like if your house burns down, it will cost more to rebuild.
Insurance companies need to take these factors into consideration because they need to cover their costs to hopefully make a profit. So if your house does burn down, the cost to rebuild will be more expensive than last year. So you need to pay more now in case of that unlikely event happening.
Increased Claims in the Area:
The price of your insurance increases if people in your area are claiming. The insurance company can pinpoint all the claims in your area, using a super computer of some sort. If people are claiming, they can consider where you live as a higher risk area. Therefore, you must pay a higher premium.
Are the Home Insurance Increases Fair?
Fortunately, I don’t live in a high risk fire zone, or on a flood plain. I live in the suburbs not close to anything that could be an obvious risk to my home. The insurance agent explained that people are claiming, so it must be accounted for. I would love to see the data on this, or are the insurance companies subsidizing their loses from high risk areas by slugging the suburbs?
And I could only imagine the increases Australians are getting that live in these high risk areas based on these calculations? Feel free to let me know what your increase has been? I wonder if insurance companies smooth out the increases across states or country, or is it really suburb by suburb?
Will My Home Insurance Increase Again Next Year?
The 60% increase this year was a shock. I received some answers from the kind home insurance man, but I had to ask the next logical question. Will my home insurance go up again next year? And unfortunately, there is no guarantee that it wont go up again next year.
We cannot predict the state of the economy or the future claims of people in your area. We can only hope any increases will be a more sustainable amount. A 60% increase is ridiculous. My mother (who is a pensioner) received a 60% increase and she just paid it grudgingly. I refused to just take a hit like that, so that is where the WeMoney App comes into my story.
What is the WeMoney App?
The WeMoney app is a budgeting and personal finance app that can help you manage your money, track your financial health and save money with offers on insurance, home loans, credit cards among other things. Feel free to catch up and read my review of WeMoney where I called it the “the Swedish pocket knife of financial wellness apps”. It literally does everything. Its free to download and worth giving it a try, it is highly recommended.
How to Save Money on Home Insurance Using WeMoney
Home insurance is confusing. And there is always a fear that you if you switch, your house will burn down and your vintage stuff won’t be covered. The application process can be lengthy and it doesn’t mean you will save any money. I have friends that tried to find better deals and couldn’t find anything cheaper.
With this and my 60% increase in mind, I thought I would try the WeMoney app to see if I could get a cheaper offer. Although I reviewed the app and I loved it, I didn’t try getting a quote on any financial products. So I thought I’d give it a try and see what happened.
I logged into WeMoney, went to the insurance section and created a quote within minutes. I tẃeaked my quote to make sure it was for the same value and excess of my current quote.
Within 5 minutes, I had a quote that was 500 dollars cheaper. And if I chose to not pay in monthly installments and pay in one hit, it was even cheaper. I processed the quote and it was sent to my email so that I could resume the quote, re-tweak it and pay whenever I liked. It was so easy and I was impressed that I could save so much money with so little effort.
Saving Money Using the WeMoney App
The process of logging in and creating a quote with WeMoney was simple. My 60% home insurance increase shock has given me a new approach to any new renewal. I’m going to shop around before I sign up because there are better deals out there. The WeMoney app can give me quotes for other insurance types, credit cards, electricity, gas and home loans. It is so easy to change these days, I will not be simply renewing anything anymore. I am honestly going to use WeMoney to find a cheaper price. It’s fantastic.
The Best Ways to Keep Your Home Insurance Premium Low
When signing up for a new policy, there are many factors that go into calculating your home insurance premium. Some are out of your control, such as where you live, what your house is made of and state based taxes. But there are a few factors you can control to help reduce your home insurance premium when applying for a new home loan, via apps like WeMoney.
1. Increase Your Excess
The excess is the amount you pay if you make a claim. If your excess is low, the barrier to make a claim is low so your home insurance premium is high. The best way to decrease your premium is to increase your excess. The home insurance consultant I spoke to recommended I set my excess to $2000.
The higher excess means you will only make a claim for a substantial issue over that excess amount. For example, if a freak weather event tore down your backyard verandah. That verandah could cost you $10,000 to fix. The insurance company will pay $8,000 and you are $2,000 out of pocket after paying the excess for the claim to go ahead.
Please note, if increasing your excess, it’s important to have that excess amount of money ($2000) stored away and available in a bank account. If something bad does happen you don’t want to be looking for money to start a claim. $2000 is the recommended amount but it is a lot of money to find in an emergency.
2. Minimize Risk of Claiming to Keep Premiums Low.
The best way to keep your premiums low is to be aware of what questions they will ask about your property. You need to have locks on your house, smoke detectors and extra security can help also. If your home is secure, it reduces risk and your premium will be lower.
It’s also important to maintain your property to reduce any risks. This includes removing trees that could fall and cause damage, cleaning out gutters ensuring roof tiles are secure and sealed. Prevention is the best protection and keeping on top of your home maintenance can reduce any potential claims that can impact your future premiums.
3. Any Claim in the Last 3 years Will Increase Your Premium
If you have claimed in the last 3 years your premium will increase. This includes any natural weather events that are completely out of your control. If you have made a claim, your premium will go up. This can be a bitter pill to swallow, but accidents happen and you just need to pay and try not to claim again in future.
Best Tips on Finding a New Home Insurance Provider
Don’t be afraid to shop around every year for home insurance. If your current provider sends you a renewal that is too expensive, make a few calls. Ask them why has it gone up and see if you can get a better deal. Or apps like WeMoney can also be a quick and easy way to look at different providers.
Just be sure to be honest when signing up for a new policy. And make sure the value of your home is covered. You want to value your home accurately, and pay the premium on that value. If something does happen, and you insured your $500,000 home for $400,000, that shortfall would be a disaster.
Final Thoughts
It’s really important to have home insurance. Increasing premiums are a necessary evil so you just need to find a way to manage it. The WeMoney app provides an easy way to get a cheaper price, or to start you on your journey to shop around. I saved over $500 on home insurance in 5 minutes using the WeMoney app. That is an amazing saving and worth downloading the app and investigating the offers available through it.
M. Moneyman
FAQs
Before we wrap up let’s answer a few health insurance related questions.
Is Home Insurance Worth It?
Home insurance is important as your home is your biggest asset. If your home burnt down, or was damaged or you were robbed, that piece of mind is worth it. Accidents happen, and the worst case scenario is a lot worse if you are not covered.
It can be difficult to justify when every other tangible expense is increasing. Insurance is something you cant see or touch. But you will be thankful for having it if something happens like a fire or a break in.
For example, I know a case personally, while away on a holiday overseas, a pipe burst in my friends house burst. It flooded for over a day before it was noticed and the water was switched off. The walls and furniture absorbed the water and the place was close to being demolished. And most things were ruined. That extreme example is possible. Pipes burst and I could only imagine the nightmare scenario if there was no home insurance.
Who is the WeMoney Provider for Home Insurance
The home insurance offers within the WeMoney app are provided by Open Insurance. WeMoney members can purchase car, home and contents insurance through the WeMoney App, via Open.
Open Insurance was founded in 2016 and it operates across Australia and New Zealand. It works with brands such as Telstra Plus, Plenti, AHM and On by Energy Australia. Open Insurance policies are underwritten by Hollard Insurance, who also underwrites for brands such as Kogan.
