Why do insurance premiums change?

Insurance premiums can change over time, with several factors that play a role in determining your cover’s cost. By understanding what influences your premium, you can make informed decisions about your policy and identify what you can manage.

Please note: this information only applies to Apia Car Advantages Insurance policies and Apia Home and Contents, Home and Contents Extra, Apartment, Assisted Living and Village Insurance policies.

We’re also making changes to how we calculate your premium, including removing some discounts. For more information, please visit: www.apia.com.au/whats-changing.

What is an insurance premium and why does it change?

The cost of your insurance is called the ‘premium’. It’s the amount you pay for your insurance policy and depends on many factors. We’ll calculate your premium based on:

your risk
the excess you choose
the type of insurance and Optional covers that you choose
compulsory government charges such as stamp duty and GST, and
Emergency Services Levy, where applicable.

This isn’t a list of all our factors. The factors we use can change and how these factors combine to affect your premium will differ from person to person.

This is also why it may change at your policy renewal.

The premium you pay is also affected by other things, including (but not limited to):

the cost of claims we’ve paid to other customers and claims we expect to pay in the future
our expenses of doing business, and
insurance market conditions.

Manage your policy

Market conditions

Premiums may also be influenced by factors including (but not limited to):

inflation
supply chain constraints (like repairers, parts or materials), and
weather events.

Another impacting factor is the price of reinsurance. This is basically insurance for insurers so we can make sure we’re ready to help Australians when big events come our way.

Home Insurance

Sum Insured

The sum insured is the actual amount you’re covered for and is the most you can claim for any one incident unless stated otherwise on your policy.

Depending on your policy, you’ll have either a building sum insured, contents sum insured, or both.

You choose the sum insured when you first purchase your cover and can change it during your period of insurance if you need to. Your sum insured will be noted on your certificate.

As the price of repair materials increase, so does the cost of repairs overall. To protect you against the risk of underinsurance, we may choose to adjust the building sum insured at the end of your period of insurance. This is also to account for various factors including inflationary trends in building materials and labour costs. However, you still need to consider if the sum insured is suitable to you.

In short, this means the sum insured may need to increase when you renew your insurance, so it provides the same level of cover, otherwise there’s a risk of underinsurance.

Avoiding undersinsurance

Location

Your location plays a big role. In some areas of Australia, natural disasters or severe weather events may happen more often, which translates to a higher premium for that location.

Areas with higher levels of theft, vandalism and other incidents will also affect your premium.

Property characteristics and building materials

Your premium will be affected by things like:

the building’s age
the building’s size, and
the construction of the building.

The materials used to build a home will affect the premium charged, particularly the roof and walls.

Weather events

Weather events like fires, floods and storms are getting more severe. This means that the cost to rebuild homes and replace contents following these events may be changing, and that’s then reflected in your premium.

This change is so insurance companies can continue to help Australians recover after severe weather events.

Claims

The total number of home claims across Australia which we receive may cause premiums to change.

If big events occur, like massive floods or fires during hot summers, and we need to assist in the repair or rebuild of thousands of homes, then future premiums may be impacted.

That’s so we can provide continued support to Australians when they need it.

Car Insurance

Amount Covered

Amount Covered is a set amount and it’s the maximum we’ll pay for loss or damage to your car unless your policy says otherwise. Amount Covered is only applicable to Comprehensive Cover with Apia Car Advantage Insurance.

Keep in mind that your Amount Covered won’t automatically update if you add accessories or modifications to your car. You can increase your Amount Covered if you’ve added modifications or accessories. If you need to increase your Amount Covered, you should do so in a timely manner.

The Amount Covered is shown on your certificate. You can view and update your policy at any time using your online account.

Type of vehicle

Your car – its make, model and safety features – also plays an important role in the makeup of your premium. This can be because the cost of replacement parts may vary depending on the kind of vehicle you have, and any unique or complicated features it has.

The address and location where the car is kept

The address and location your car is kept will have an impact on your premium. This, of course, depends on where you live and your specific circumstances. This is because risk is evaluated based on location-specific data, like:

theft rates
collisions, and
natural disasters and weather events, including hail.

Driver details

Whoever is a listed driver on your policy will impact your premium.

Claims

Historical claims data is used and considered to predict how likely it is that you’ll need to make a claim in the future.

This is why your premium may change depending on the total amount of claims we receive each year across all motor policies.

How to manage your insurance so it’s right for you

Excess

Did you know you may be able to adjust your excess?

With Apia Car Advantage Insurance policies, you can choose a variable excess from the range we offer to ensure it better suits your needs.

For most Apia Home and Contents Insurance policies, you can choose a home and contents excess from the range we offer. You are not able to vary your excess with an Apia Assisted Living Residence Insurance policy.

Keep in mind that choosing a higher excess will mean you’ll need to pay this at claim time. It’s about finding the right balance for you. This excess applies to all claims and is payable in addition to any other excess that applies, unless your policy states no excess applies to your claim.

Read the Additional Information Guide for further information.

Sum insured (for Home policies)

Ensure your sum insured reflects the right amount for your needs – not too much, not too little.

Overestimating means paying higher premiums, while underestimating could leave you at risk of underinsurance, which means you may not be able to meet the costs of rebuilding your home in the case of a total loss claim.

If you adjust your sum insured your premium will change as well.

If you need a little help with finding out how much your sum insured should be, for either a complete home rebuild or full contents replacement, you can use out home building calculator or contents calculator.

Explore our sums insured calculator

Make sure your details are all up to date

When renewing your cover, always check that your policy details are correct. Here are a few examples:

If your driving habits have shifted since you took out your policy, and the number of kilometres you now drive has changed, you should ensure that’s reflected in your policy.
Check that the listed drivers are the regular drivers of your car.
Refer to the AIG for information regarding excess that apply for different policies and cover.
If your car was under finance when you took out your car insurance, but you’ve now paid off the loan, make sure your policy reflects this.
If your home has been renovated recently, make sure the sum insured is still sufficient for your home.

Review your optional covers so that your policy still has everything you need. If a change is needed, you can add or remove some optional covers to fit your circumstances.

You can easily manage your policy online. When reviewing your policy, always consider your own personal circumstances.

For Home:

Discounts are also a factor that affect your premium. The premium you pay for your insurance includes any discounts we have given you. Any discounts are usually calculated and applied in a set order before government taxes and charges.

You should check your relevant Additional Information Guide for information on discounts. To make changes to your policy, log in online to your account or give us a call on 13 50 50.

Apia’s Online Services are not available, or not fully available, for all Apia branded products, policy types or claim types. See Apia’s Online Terms and Conditions for more information.

Explore our sums insured calculator

The information is intended to be of general nature and for information purposes only. Subject to any rights to may have under law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.

The information provided is accurate and true as of 24/06/2026, noting we may change our pricing practice (and the premium factors) from time to time.

This content is current for Apia Car Advantage Insurance Policies, and Apia Home and Contents, Home & Contents Extra, Apartment, Assisted Living and Village Insurance policies commenced or renew on or after 23 March 2021.

This information does not apply to Apia Landlord Insurance, Apia Caravan Insurance, Apia Motorhome Insurance, Apia Motorcycle Insurance, Apia Boat Insurance, Apia CTP/MAI Insurance, Apia Health Insurance or Apia Funeral Insurance.

Australian Pensioners Insurance Agency Pty Limited ABN 14 099 650 996 is an authorised representative of AAI Limited ABN 48 005 297 807, the product issuer for Apia Home, Landlord, Car, Motorcycle, Caravan, Motorhome, Boat, Travel, Compulsory Third Party Personal Injury (CTP) Insurance and Motor Accident Injuries Insurance (MAI Insurance).

This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. Read the Product Disclosure Statement before buying or making any decisions about Apia insurance products. The Target Market Determination is also available