Home Insurance

Home underinsurance is common and can leave owners facing large out-of-pocket costs if they need to rebuild, repair or replace their home. Understanding “sum insured”, replacement costs and policy clauses such as coinsurance can help households review cover and reduce the risk of a shortfall.

A cross-sector group spanning insurers, banks and consumer advocates has proposed linking home resilience upgrades to cheaper insurance premiums and lending, as more households face affordability stress from rising disaster risk and building costs.

Major insurers have stopped issuing new home policies in California, echoing a pattern long familiar in hurricane- and flood-prone states such as Florida. Rising disaster losses, higher reinsurance costs, and regulatory constraints are intensifying pressure on insurers and on public backstops—highlighting the growing urgency of land-use, building-code, and risk-disclosure reforms.

Climate change is pushing Australian home insurance premiums higher and putting coverage out of reach for some households. A new approach adopted in California—allowing forward-looking climate and catastrophe models in pricing, but requiring insurers to expand coverage in high-risk areas—highlights one possible path to keep cover available, reduce sharp post-disaster price swings, and encourage safer homes over time.