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Can working from home save you money on insurance?

A lower risk profile makes it the perfect time to negotiate a discount on your home, contents and car insurance

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Last updated: 31 July 2020

Need to know

  • If your circumstances have changed, you need to tell your insurer
  • You could negotiate a reduction in your premium if your risk level has fallen because you're at home more often
  • Make sure you tell your insurer when you start working in the office again

COVID-19 has brought about many negative changes in our world, but some would say there have also been upsides: a slower pace of life, the opportunity to work from home, less time battling peak-hour traffic. 

There's another potential upside, too – you could save money on your car, home and contents insurance. 

Here's why: if you're at home more often and driving your car less, then your level of risk changes, which can affect your insurance premiums. It's worth contacting your insurer to see if they can offer you a better deal. 

To help you, we asked CHOICE insurance expert Daniel Graham what you need to do and how to approach your insurer to get the best deal. 

Why you need to tell your insurer if you're working from home

When you're buying an insurance product, your level of risk will affect how much you have to pay. For home insurance, for instance, insurers will assess crime rates in your neighbourhood, your home's security features, the age of the building, occupancy and other factors.

You may not be aware, but you have an obligation to let your insurer know when anything changes that might affect your level of risk.

"As an insurance customer, you have a duty of disclosure to your insurer – if your circumstances change, you're required to tell them," says CHOICE insurance expert Daniel Graham. "Let the insurer decide if it's relevant information." 

Changes to your home and contents insurance

No doubt your pets and your pot plants are happier if you're home more often – and you might find that your insurer is too. 

"Being at home during the day can help reduce your risk of burglary, since an unoccupied home is an easier target for burglars than an occupied one," says Daniel.

And while you're probably running your heater more often through winter, which may increase your risk of a house fire, you'll also be able to catch things like a burst water pipe or a hotplate that wasn't turned off before they become a disaster. 

For homeowners, this will change the risk profile for both your home and contents insurances. And renters with contents insurance will have grounds to approach their insurer for a cheaper premium. 

(And yes, contents insurance isn't just for homeowners. Here are some reasons why contents insurance is good for renters.)

Changes to your car insurance

Whether you used to drive 100km to the office or just to the train station to commute to work, if you're now working from home you may find you're using your car far less than you did before COVID. 

While that's great for the planet (and probably your blood pressure if you're no longer having to sit in peak-hour traffic!) it can also be good for your car insurance. 

Think about it: not only are you putting fewer kilometres on your car, you're also less likely to have an accident and you're probably also parking your car somewhere safe (especially if you have off-street parking). 

These are all things that you should tell your insurer about. 

How to ask your insurer for a premium reduction

When you tell your insurer about changes to how you use your car or how often you're at home, it's also the perfect time to ask them what they can do for you. 

"Absolutely leverage your responsibility to your insurer to get a better premium if you can," says Daniel. 

 "The best way to go about it is to call your insurer and tell them that your circumstances have changed. You can then say, 'Because my risk is lower, I'd like to renegotiate my premium'. 

The threat of cancelling is always a good way to get your insurer into gear

Daniel Graham, CHOICE insurance expert

"They should have discretion to give you a discount. And if they don't, then go somewhere else. 

 "The threat of cancelling is always a good way to get your insurer into gear. As long as you're prepared to walk, by all means threaten to."

Shop around when bargaining with your insurer

If you're planning to ask your insurer for a cheaper premium, it's a good idea to do some research first so you know what other insurers charge. That way you'll be in a better position to negotiate.

"Get three or four quotes from CHOICE's recommended policies and you can ask your current insurer to match the cheaper quote for you," says Daniel.

Keep your insurer updated if your circumstances change again

Just as you're obliged to tell your insurer if you're at home more often, you'll also need to tell them if your circumstances change and you're home less – for instance, if Covid restrictions in your region have changed and you start going back to the office.

"Make sure that you're clear on what you need to tell your insurer if you start working from home less, because you'll also have a duty of disclosure to tell them about those changes too," says Daniel. 

"There's an expectation that eventually most of us are going to go back into the office. It's worthwhile asking your insurer what they expect."

Tips and traps to look out for when negotiating a discount

Regardless of whether there's a global pandemic or not, there are some things to look out for when shopping for a better deal on your insurance.

Watch out for bill shock

Be wary of deals that seem too good to be true. Good discounts are often available for new customers, but beware the 'bill shock' (the steep rise in price) when the full premium kicks in. 

"There are all sorts of discounts that insurers will offer you, and during the pandemic a few insurers are offering additional discounts," says Daniel. 

"If you get a quote from an insurer, it's important to take into consideration how much of that price is affected by the discount they're offering you, because you probably won't get that next year. 

"If you get a 10–20% discount for buying a policy online, you'll not only have a yearly premium increase, but also that 10–20% increase."

Avoid the 'lazy tax'

If you stick with the same insurer year after year, you'll probably find that your insurance premium goes up every year without fail. Compare what you're paying with an online quote for a new customer and you might be surprised by how much extra you're being charged. 

Get quotes from at least three other insurers, plus your existing insurer, before you renew your policy. Your insurer may be prepared to match or beat quotes from their competitors. 

Make sure your insurance is right for you

While you may be able to get a good deal if you take out several insurance products with the one insurer, make sure that each product is right for you. A discount on your home and contents cover isn't worth it if you end up with a crummy car insurance product. 

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