Having insurance coverage that meets your needs is essential. However, simply purchasing a policy and forgetting about it can be costly. An annual insurance review ensures your policies remain relevant, affordable, and legally compliant.
Let’s Get Straight to the Point
If you're short on time, here’s why reviewing your insurance policies each year is non-negotiable:
- Avoid Underinsurance – Rising property values, inflation, and new risks could mean you’re not fully covered.
- Update Coverage for Life Changes – A new home, business expansion, or changes in family dynamics all impact insurance needs.
- Save Money on Premiums – Comparing providers, adjusting excess amounts, and bundling policies can reduce costs.
- Stay Compliant with Australian Laws – Insurance regulations and tax deductions change; ensure your policies align with current laws.
- Protect Against New Risks – Cyber threats, extreme weather, and liability changes should be factored into your coverage.
Now, let’s consider why you should make an annual insurance review a habit.
Why Reviewing Insurance Policies Annually Matters
Many Australians set and forget their insurance policies, only realising they are underinsured or overpaying when it’s too late. A yearly review helps ensure financial security and peace of mind.
Changes in Personal or Business Circumstances
Insurance policies are based on your situation at the time of purchase. However, life and business changes can make old policies outdated.
Major Life Events That Require a Review
Your insurance needs will change whether you’re a homeowner, business owner, or employee. Some key life events that warrant a policy update include:
- Buying or selling a home – Property values change, and your home insurance should reflect its current market value and replacement cost.
- Marriage, divorce, or having children – Your life insurance should provide adequate financial support to your family in case of unforeseen circumstances.
- Starting a business or expanding operations – If you’re self-employed or running a business, you must ensure your liability, property, and employee insurance align with your business growth.
- Retirement or career changes – Changes in employment status may affect income protection policies, superannuation-related insurance, and private health coverage.
- Health conditions or lifestyle changes – If you develop a medical condition, adjust your health or life insurance to avoid unnecessary financial burdens.
Staying Protected Against New Risks
Risks evolve, and what was sufficient coverage last year may not be enough today.
Emerging Risks
- Cybercrime and Data Breaches – More Australians work remotely and shop online, leading to increased cybersecurity threats. Businesses and individuals should consider cyber liability insurance to protect against financial losses from hacking, identity theft, and fraud.
- Extreme Weather Events – Climate change has led to increased natural disasters, including bushfires, floods, and cyclones. Home and business owners should ensure their policies include adequate flood and fire damage coverage.
- Liability Lawsuits – Public liability claims have increased in Australia. Business owners should assess whether liability coverage is enough to protect against costly legal battles.
- Rideshare and Gig Economy Coverage – If you drive for Uber, deliver food via DoorDash, or rent out property through Airbnb, your standard insurance may not cover incidents related to these activities.
Ensuring Compliance with Australian Regulations
Australia’s insurance landscape is constantly changing. Keeping up with these changes ensures you remain legally compliant and don’t miss out on important benefits.
Key Australian Insurance Updates
- ASIC and ACCC Guidelines – The Australian Competition and Consumer Commission (ACCC) has implemented new consumer protections, ensuring insurers provide clearer terms and prevent misleading policy descriptions.
- New Home Insurance Requirements – Due to increasing natural disasters, certain regions now require mandatory flood and fire coverage as part of home insurance.
- Superannuation and Income Protection – Many Australian super funds have updated their policies, and some now remove default income protection insurance unless members actively opt-in.
- Health Insurance Rebates – The Private Health Insurance Rebate threshold has been updated for 2025, impacting how much Australians can claim private health insurance on tax returns.
If you haven’t reviewed your policies in the last 12 months, you may be paying for outdated coverage or missing out on necessary protection.
Avoiding Underinsurance and Coverage Gaps
Many Australians assume their current policy will be enough, only to discover during a claim that it isn’t.
How to Identify Underinsurance
- Check the sum insured – If the value of your home, business, or assets has increased, your coverage must match.
- Assess replacement vs. market value – Some policies only pay for the market value of a property, which could be significantly less than the cost to rebuild.
- Review liability coverage – Public liability coverage should align with current legal costs if you own a business.
- Understand exclusions – Many policies have fine print that excludes key risks like floods, earthquakes, or certain health conditions.
Underinsurance is a common problem in Australia, with the Insurance Council of Australia estimating that 83% of homeowners are underinsured. A review can prevent financial disaster when making a claim.
How an Annual Review Can Save You Money
Many Australians stick with the same insurer for years without checking for better deals. Regular reviews help avoid unnecessary expenses.
1. Compare Premiums and Negotiate Better Deals
Insurers adjust premiums yearly based on risk, competition, and claims history. Without checking, you may be paying more than necessary.
Ways to Reduce Insurance Costs
- Compare policies annually – Shop around for better premiums and features.
- Increase excess – Opting for a higher deductible lowers monthly premiums.
- Bundle policies – Many insurers offer discounts when bundling home, car, and life insurance.
- Negotiate with your provider – Long-term customers may qualify for loyalty discounts.
2. Eliminate Unnecessary Add-ons
Insurers often add extras that may no longer be needed. Common examples include:
- Rental car cover when you don’t drive often
- Accidental damage insurance for outdated appliances
- Extended travel insurance when local coverage suffices
3. Ensure You’re Getting the Right Tax Deductions
Some insurance policies are tax-deductible in Australia, including:
- Income protection insurance (deductible under the Australian Taxation Office guidelines)
- Business insurance (public liability, professional indemnity, and workers' compensation)
Checking with a financial advisor ensures you’re not missing tax deductions.
Steps to Conduct an Effective Insurance Review
Step 1: Gather Your Policy Documents
Ensure you have the latest copies of the following:
- Home and contents insurance
- Car insurance
- Business insurance
- Health and life insurance
- Income protection and disability cover
Step 2: Assess Your Coverage Needs
Ask yourself:
- Have my circumstances changed?
- Are my current sums insured still adequate?
- Do I need additional coverage for new risks?
Step 3: Compare Policies and Providers
- Get updated quotes from different insurers.
- Check for hidden fees, exclusions, and limits.
- Read customer reviews for insights into claim handling.
Step 4: Consult an Insurance Broker (Optional)
A professional broker can help identify the best policies for your needs and negotiate better rates.
Step 5: Make the Necessary Adjustments
- Cancel outdated policies.
- Increase or decrease coverage as needed.
- Update beneficiaries and contact details.
Conclusion
An annual insurance review takes just a few hours but can save thousands of dollars and provide financial security. Whether you do it yourself or with a broker, the key is to ensure your policies remain updated with your lifestyle and legal requirements.
By taking a proactive approach, you can stay protected, avoid unnecessary costs, and know that your insurance works for you when you need it most.
Reviewing your insurance annually can help you find better deals, reduce unnecessary coverage, and qualify for discounts. Many Australians save 5-20% by comparing policies and adjusting excess amounts.
A full insurance review typically takes 1 to 2 hours, depending on how many policies you have. Using an insurance broker makes the process even quicker, as they handle comparisons.
Failing to review your policies can lead to underinsurance, meaning you might not receive enough payout in case of a claim. You also risk paying higher premiums than necessary or missing new policy exclusions that could affect coverage.
Yes, many insurers offer loyalty discounts, and you can also negotiate lower premiums by bundling policies, increasing your excess, or proving a good claims history. Comparing quotes from different providers strengthens your negotiating position.
The best time to review is before your renewal date when you have time to make adjustments or switch providers. However, you should review your policies immediately if you've experienced major life changes (e.g., a new home, business, or marriage).
