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How the cost of insurance is determined

11 June 2019 | 4 min read

How are payments calculated? And why do they vary?

Your insurance is one of those wonderful things – when you need it, you receive a huge amount relative to your payment.

Like all insurance providers, we think about how much risk each insurance policy entails. In other words, we figure out how likely you are to make a claim.

If you’re unlikely to make a claim, we won’t charge you high premiums. But if there’s a higher chance that you'll need to claim, it’s worth paying extra because you’re more likely to regain your investment as part of an insurance payout.

We also consider the value of what you're insuring. Things that are worth more cost more to repair or replace, so if worst comes to worst, you’ll need more money from us.

Finally, your premium includes local, state and territory government stamp duties and levies, as well as GST.

Home insurance

We take many factors into account when deciding on the right cover – and the right cost – of your home insurance.

First, there’s the choice you make about your cover. We offer three levels of home insurance cover at different price points. So the more you put in, the more you get back when something goes wrong.

Of course, there’s also that risk factor – the higher the likelihood of something's going wrong, the higher the premiums. Remember: it’s worth paying the extra when you’re more likely to claim.

We consider:

  • how your home is occupied – it’s safer if someone is there
  • how it’s used – for example, as a business location – theft rates and the likelihood of natural disasters, such as flood, cyclone or bushfire age and construction
  • how well your home will cope with challenges.


When you get an online quote, we’ll ask questions to determine your property’s risk.

We also consider the value of your home and contents. It’s important to choose insurance levels that cover the cost of rebuilding and replacing your home and contents – even if that insurance costs a bit more.

We don’t want you to be caught short by failing to plan properly. To work out the right cover for you, use our online calculators.

Car insurance

Car insurance is the cover you’re most likely to use. Almost everyone has a bingle at some point, whether it’s a slip in concentration or someone else’s fault. In fact, it’s so likely that insurance is compulsory in some states.

As with house insurance, you can choose to pay higher premiums to secure better cover. We offer three levels at different prices. If you’re worried only about the cost of bumping into someone else’s Porsche, we recommend Third Party. If you want to cover repairs to your own car (and much more), try our Comprehensive cover.

Again, we also consider risk. If you’re more likely to claim, it’s worth paying more to ensure you're well covered. Here are the factors we consider:

  • your age – young drivers tend to have more accidents
  • where you keep your vehicle at night – garages are safer than streets
  • location – the likelihood of theft in your suburb
  • your driving history – if it’s good, your premium will be lower.

Finally, we think about how much it will cost to repair and replace your car. The make and model, and your car’s age and type, all affect the cost of your premiums.

When you get an online car insurance quote, we ask questions to calculate your risk and the cost of your car insurance.

Note: This article contains general advice only. Readers should seek a trusted professional’s advice on financial matters.

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Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. Any advice provided on this website is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable Disclosure Documents before acquiring any product described on this website. Please also review our Financial Services Guide (FSG) before accessing information on this website. Information on this page can change without notice to you.

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