The total premium you pay for your insurance is made up of several components. Some are set by us and others relate to Commonwealth and State taxes.
What we charge you
Insurance is based on a pooling concept. Your premium contributes to an insurance pool, so you can be compensated if an insured event happens. The amount we charge you is based on a range of factors, including your own circumstances, the likelihood of a claim, and the costs associated with operating our business. These factors vary by product type.
New South Wales Emergency Service Levy (ESL) contribution. The ESL rate is charged as a percentage of the base premium
Under Australian tax law, most types of general insurance are subject to a 10% Goods and Services Tax (GST). This amount is charged on the insurance premium and collected by insurers.
Stamp duty is a separate government requirement payable when a premium (or instalment) is made. It’s not subject to GST so is calculated after GST has been applied. The rate of stamp duty varies depending on the State and the type of insurance.
Your premium comparison
This makes life easy to see how your premium has changed year on year at a glance. It also compares the NSW Emergency Service Levy (ESL) contribution.
Your driving experience and history, the type and age of your car, how it’s used, where it’s usually parked, as well as car insurance claims you may have made in the past, can all impact your car insurance premium.
Increases in the cost of repair and replacement can influence your home insurance premium, together with a change in location or your claims history. It can also change if you’ve updated your home insurance, like changing the amount of cover you have.
FAQs about premiums
Your renewal notice will show a table comparing last year's premium to this year’s. Last year’s premium comprises of the total amount you were charged for your policy, with any changes you made during the year, ‘annualised’.
This means if you made a change mid-year, we’ve adjusted it to show how much you would have paid for the whole year – so you can make an annual like-for-like comparison.
Your premium is likely to change each time you renew because premiums are affected by many different things, including changes in technology and repair costs, your sum insured or claims history. Sometimes, a premium will be different because you’ve changed something, like updating your home insurance.
We continually monitor the premiums we receive with the cost of paying claims, so we regularly review our pricing to get the balance right. It means that your premium is likely to change each time you renew.
Your premium is the cost of buying your policy. It’s the amount we set by taking into account things like the chance of you making a claim under your policy, the options you’ve chosen, the overall cost of claims we expect to pay and our expenses of doing business as well as other commercial factors.
These vary from person to person and may include:
- Type of cover selected
- How much cover you want
- Optional benefits you’ve added
- Previous claims and incident history
- The excess you’ve chosen
- Commonwealth taxes and any state or territory duties or levies
Find out more from the Insurance Council of Australia here.
Like other insurers, we rely on claims histories, statistics and probability calculations to plan how much we may have to pay in claims. We also engage professional experts to help us with information on specific risks, like flood mapping or seasonal weather forecasts.
Calculating a premium is complex. It balances the availability of funds (the premium pool), the likelihood of certain claims (the risk) and the ability for the pool to cover the cost of claims. Find out more from the Insurance Council of Australia here.
Increase your excess
Generally, choosing a higher excess means you lower your premium. Be sure to pick an excess you can afford to pay at short notice if you need to make claim.
Reduce your risk
A safer home can mean a lower premium. Improving your home security can help because you’re less at risk from burglary or theft. You may get a discount on your home and contents policy if you have security devices in place like a monitored alarm.
Get a premium health check
Ask us to review your premium to make sure you’re benefiting from all the discounts you’re entitled to.
An excess is the amount you agree to pay if you make a claim. You can vary your excess. One way to reduce your premium is to choose a higher excess. If you choose a lower excess, your premium will be higher. It’s up to you.