Insurance.
Risk priced honestly.
Home insurance is no longer a zone-blind average. 9.27 million Australian homes are now insured under a system that prices low-risk and high-risk separately and supports high-risk homeowners through a public reinsurance pool rather than through cross-subsidy hidden inside premiums.
Of the 9.27 million homes, 8.34 million low-risk homes (not in flood or fire zones) pay an average premium of $1,462 per year — saving $600 to $1,000 per household. 927,000 high-risk homes pay a capped premium of $8,000 per year, saving on average $3,000 each.
The gap is funded by a $16.01 billion reinsurance pool, contributed to by high-risk homeowners, the Commonwealth, the insurers, and mortgage holders, and sustained over 50 years.
The high-risk population shrinks over time as homes are physically fortified. The capped premium falls in absolute terms across the 50-year window of the reinsurance pool. Insurance is treated as the actuarial product it is, rather than as a political artefact.