A homeowner whose premium rose by 91% following a risk reassessment has lost a dispute with RACQ Insurance after the ombudsman found the increase was fair.  

The complainant was told his home premium would rise from $2066 to $3946 on renewal this year.

He said he had expected an increase but the sum was unreasonable, inadequately justified and should be illegal.  

He added he felt obliged to remain with the insurer because his mortgage required him to have a home policy.  

RACQ Insurance said the risk reassessment flagged a higher bushfire risk. It also noted that an emergency services levy increase was a contributing factor.

The insurer provided the Australian Financial Complaints Authority with a statement from its pricing manager, who said the premium was correctly calculated.  

In its dispute decision, the ombudsman says it has limited jurisdiction over premium increases and can only overturn changes made “incorrectly or without justification”.  

It says the risk reassessment provides a legitimate reason for the hike.

“While I acknowledge the complainant’s concern regarding the percentage increase from the previous year, I am not satisfied the premium increased without justification,” an authority member said.  

“This is because the insurer has explained the increase was due to its re-rating of the risk following a review of its pricing and risk modelling, along with a range of other factors.”  

See the ruling here.