Residents in the Hawkesbury region face the highest average home insurance premiums across Sydney’s 24 local government areas, at $7033 a year, analysis by Finity reveals.

Average residential building insurance premiums across metro Sydney are up 66% since 2020.  

In extreme cases, individual premiums have topped $30,000 in flood-prone areas, Finity says.  

Principal Sharanjit Paddam tells insuranceNEWS.com.au insurers have become better at understanding where flood risk is and reflecting it in their pricing.

“It’s not everybody who is affected ... Not everyone is bearing the burden equally,” he said.

“People with higher risks are getting much, much higher increases than people with lower risk.

“The troubles of the world do show up in people’s premiums – climate change, geopolitical disruption, they end up in people’s home insurance. We're not immune to this.”  

Mr Paddam says $6 billion floods in 2022 greatly improved understanding of at-risk locations in NSW.

The Finity analysis comes as insurers have received about 4130 claims following severe flooding in the Mid North Coast, Hunter and Greater Sydney regions last week. Insured losses from flooding associated with Cyclone Alfred have passed $1 billion.  

Government action will take time to improve matters, Mr Paddam says.

“It doesn't take away the problem that we have right now where historically we have seen development in areas that are not appropriate.

“If you bought a house 20 years ago – and that information wasn’t available, but you have to pay the insurance today – that is a hard pill to swallow.”

Insurers have been sending price signals “for a long time and ... been pointing out where there are problems and calling for action, but until very recently we have seen very few people listen”.

Insurers are not involved in property development planning processes but are “left with these houses at the end that they have to try to insure, and they’ve had no say in.

“It’s a high risk, so they have to offer a high premium. My question is, are the right mechanisms in place so these messages the insurance industry does send are listened to and acted on?”

Mr Paddam recommends a focus on reducing costs, rather than “arguing about who pays” for past poor planning.  

“The reality is that we all lose ... because when people don’t have insurance, those costs fall on to governments, so we’re paying for this anyway.

“Why don’t we do something to reduce that cost and invest in improving resilience, so that in the long term we’re paying less?”

Finity’s list of Sydney LGA average building premiums