How home insurance has become more personalised over the past 30 years

Wind the clock back 30 years and home insurance looked quite different from today. More than 40 per cent of the Australian insurance market was held by state offices, and customers who wanted to insure their home or contents had a limited choice of policy types. 

Alex Dunn, executive manager of property claims at NRMA Insurance, says she’s seen plenty of positive change in the 30-plus years she’s been in insurance as the market shifted away from state-run companies to private corporations such as NRMA Insurance, which prides itself as being customer-centric.

“Many years ago it was more of a standard level of cover with no flexibility for add-ons such as laptops, nor the ability to insure just one item. There was also no option for accident cover at all,” she says. “Customers didn’t have options for premium cover, it was more of a one-size-fits-all approach.”

It was also a time before many regulatory reforms, including the Financial Services Reform Act, says Daniel Berry, a partner at insurance brokerage Dudgeon Berry Insurance Group.

“Product coverages and terminologies could vary significantly between insurers, and it was probably pretty difficult for someone to make decisions on which insurance product was right for them,” he says.

As customer needs and expectations changed, providers of home insurance had to evolve to meet the market.

Dunn says higher disposable incomes and the technology revolution meant that instead of a single television set, customers were in possession of multiple devices including laptops, mobile phones, gaming stations and smart TVs.

“There are so many more portable items now and people are seeking cover for those valuables,” she says. 

“Also, there are different insurance needs for different age groups, so the industry needed to become more flexible. Now you can up your add-ons as your income goes up, decrease your excess and manipulate the end premium cost based on what you can afford.”

Today’s home insurance consumers have access to a multitude of products and benefits, says Berry. 

“Whether you want a ‘listed events’ product that just covers the big things like fire, storm, cyclone and theft, or if they want a broader accidental damage benefit that provides some additional covers for accidental loss or damage [there’s a product available],” he says. 

“You then also have additional benefits within products that you can opt into, like cover away from the home, fusion cover or taking higher limits for things like jewellery, collections and artwork. Some people opt for lower excesses, while others prefer larger excesses to take advantage of premium savings.”

Berry uses the example of a customer who has a large collection of art or wine and a second customer that has a beachfront property to show how home insurance can be personalised. 

“The customer with the art or wine collection needs to consider what the limitations are within a particular product,” he says. 

“Many will have sub-limits for these types of things and would therefore require them to purchase additional coverage to ensure that they are protected.

“The beachfront customer needs to consider what products include coverage for things like storm surge, as not all [policies] cover this.”

Dunn says many younger customers and tenants choose NRMA Insurance’s Single Item cover.

“Rather than insuring all your contents, you might just insure a single item,” she says. 

“This product is very much directed at younger customers who may only have one really valuable thing they want to cover for loss or damage.”

While the premiums for single item insurance will be quite different from a comprehensive home and contents insurance policy, Dunn says all NRMA Insurance customers will receive the same high level of service.

Berry encourages home owners and tenants to analyse their biggest risks and find a product that will cover that risk. If you’re not confident in choosing a suitable policy, an insurance broker can help you to make an informed decision.

“Each client or risk has its own intricacies, so it’s always important to understand what the risks are and also understand which insurance product is suitable,” he says.