Where do home premiums go?
We understand that changes to your premium can be confusing. As a guide we have broken down where insurance premiums go, because it’s important to us that you know where your money is going.
Naturally, you'd expect one of the largest parts of the premium collected are used to help payout claims. Claims are an important part of what we do to help protect what matters to you.
A part of the premium collected goes towards paying our insurance premium to reinsurance providers. We purchase additional cover of reinsurance to protect against the exposure to large scale events such as storms, floods and cyclones. This helps us maintain our ability to payout claims.
A part of the premium goes towards government taxes and charges. After we have calculated the amount to cover your insurance policy, any applicable stamp duty, GST, charge and levy is then applied.
Every business has operating costs that enable them to continue their operations and service their customers. That's why a percentage of the insurance premium goes towards the operating cost of running our business. We also invest in the technologies and products that would improve the services we provide to you.
Like any business, we need to make a profit to ensure we can continue running our business year after year. Our profit can vary significantly from year to year depending on whether there were large scale events like storms, floods and cyclones.
What data did we use?
- The information above is based on data aggregated across all AAI Limited Home Policies and is calculated based on the period from 1 July 2021 to 30 June 2023. The data may vary from time to time, depending on the measurement period.
- AAI Limited Home Policies mean home building, home contents, home and contents (including fire and theft contents), landlord building, landlord contents, landlord building and contents, strata insurance and relocatable home policies of all the AAI Limited Brands, issued by AAI Limited ABN 48 005 297 807 between 1 July 2021 and 30 June 2023 and includes policies with all types of optional covers. It does not include any home cover sold under a business policy.
- AAI Limited Brands mean AAMI, GIO, Suncorp Insurance, Apia, Shannons, CIL Insurance, Terri Scheer, Vero Insurance and Essentials by AAI.
- Percentages are rounded to the nearest whole number.
- Where do premiums go may differ and may change from time to time. The information is intended to be of general nature only. Subject to any rights you may have under any 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.
What impacts premium?
The below general information is relevant to Apia home (including home, contents, home & contents, home & contents extra, apartment, assisted living, village cover), landlord building, landlord contents, landlord building and contents (unless otherwise stated). Please refer to your relevant policy documents for more detail.
Many factors can impact the amount of premium that we charge our customers, some key matters are set out below. In addition to change in circumstances impacting your cover, premiums are also impacted by changes in our pricing practice, pricing factors and how we calculate premium from time to time.
Sum insured is the most you can claim for any one incident less any deductions that apply, unless stated otherwise in your relevant PDS. Repairs on high value homes also tend to cost more, resulting in higher premiums.
In some areas of Australia, natural disasters or severe weather events can happen more often and therefore, location can impact the premium more substantively. Certain areas with higher risk of theft, vandalism and other similar incidents will also affect the premium.
The materials used to build a home will affect the premium charges, in particular, the roof and wall materials as these are what protects a home from outside elements.
Excess is the amount you ordinarily have to pay for each incident when you make a claim. If you choose a higher excess, you may be out of pocket more when making a claim. A higher excess reduces our claims cost meaning we can reduce your premium. Higher excess means a lower premium, lower excess means a higher premium. Changes to excess not applicable to all covers.
A premium may change depending on the total amount of claims we receive each year. If we receive more claims than expected, premiums can be impacted.
After we have calculated the amount to cover your insurance policy, any applicable stamp duty, GST, charge and levy is then applied. Government taxes and charges may change from time to time.
How can I review my premium?
The below general information is relevant to Apia home (including home, contents, home & contents, home & contents extra, apartment, assisted living, village cover), landlord building, landlord contents, landlord building and contents (unless otherwise stated). Please refer to your relevant policy documents for more detail.
Review your policies to make sure all details are correct. Some changes can impact your premium if they affect the premium factors. Below are some ways you can influence how much premium you pay under our suite of home products. When reviewing your policy, you should always consider your own personal circumstances and check whether your policy suits your own needs.
By increasing your excess it will lower your premium. However, decreasing your excess will mean you will pay a higher premium. Changes to excess not applicable to all covers.
The amount you select as the sum insured for your building and contents will also influence your premium.
On renewal we also consider a range of factors that can influence the cost to rebuild the building and may choose to adjust the building sum insured shown on your certificate of insurance at the end of each period of insurance. This is to account for various factors including inflationary trends. However, at each renewal, you need to consider if the level of sum insured is sufficient for your situation and contact us if it is not appropriate.
Discounts are also a factor that can affect your premium. The premium you pay for your insurance includes any discounts we have given you. Any discounts are usually calculated and applied before the application of government taxes and charges.
Please refer to 'Ways to Save' for detailed information about discounts and savings available.
You should check your relevant policy documentation 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 of Apia branded products, policy types or claim types. See Apia's Online Terms for further information.
Disclaimers:
- The information is intended to be of general nature only. Subject to any rights you may have under any 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 7th September 2023, noting we may change our pricing practice (and the premium factors) from time to time.
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 (including home, contents, home & contents, home & contents extra, apartment, assisted living, village cover), landlord building, landlord contents, landlord building and contents. Read the Product Disclosure Statement before buying this insurance. Go to apia.com.au for a copy. 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. Various products and services are provided by different entities of the Suncorp Group. The different entities of the Suncorp Group are not responsible for, or liable in respect of, products or services provided by other entities of the Suncorp Group.
