How premiums are calculated

How is the cost of insurance determined?

The cost of your insurance policy depends on your risk, which in turn reflects how likely you are to make a claim. The lower your risk, the lower your premium will generally be.

It also depends on the value of what you are insuring, because things with a higher value will generally cost more to repair or replace.

Your premium is also made up of relevant local state and territory government stamp duties and levies, as well as the GST.

How is the price of home insurance calculated?

Some of the key factors which can influence the price of home insurance include:

• The level of cover you choose – CGU offers three different levels of home insurance cover, at different price points
• How your home is occupied and used – using your home as a business, or leaving it unoccupied for long periods can impact cost
• Where your home is located – if your home is located in an area with statistically higher theft rates, your risk is higher and so too are your costs. If you're located in an area prone to natural disasters, such as flood, cyclone or bushfires, your risk and consequently insurance price will also increase
• What your home is constructed of, and how old it is – age and construction can indicate how likely your home is to structurally withstand damage
• The value of your home and contents – the value of your home and contents can influence the cost to replace them in the event of a claim. It’s important that you have enough insurance to adequately cover the cost of rebuilding your home and replacing your items. Tools such as CGU’s home and contents calculators can be useful in helping you get an estimate¹.

When you get an online home insurance quote from CGU, we ask questions to help determine your property’s risk.

How is the price of car insurance calculated?

Some of the key factors which can influence the price of car insurance include:

• Your age – young drivers are less experienced and tend to be in more accidents, so are a higher risk which influences premiums
• Where your vehicle is kept overnight – vehicles kept in garages are less likely to be damaged than those parked on the street
• Your suburb or town – the location where you regularly park your vehicle may also be more or less prone to theft
• Your driving history – if you have a good driving history, where you haven’t had any claims made against you, your risk is lower and your premium will be as well
• The make and model of your car – your car’s age and type influences what the cost to repair or replace your vehicle will be.

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

Options for paying your insurance

CGU offers customers to pay by monthly or fortnightly instalment. Learn more