When Andrea McGann from Botany received her building and contents insurance renewal, she was shocked. The quote came to a staggering $19,311—far more than she expected. “I couldn’t believe what I was reading,” she said, expressing her disbelief that anyone would expect a typical homeowner to pay such a high amount.
Just two years ago, Andrea paid around $3,600 for her insurance. Despite buying her three-bedroom home six years ago for a reasonable price, the premium skyrocketed. Many fellow Botany residents shared her frustration on social media, revealing they were facing similar hikes.
Experts suggest this rise in insurance costs reflects a growing trend. Insurers are becoming increasingly cautious due to climate risks, not just riverine flooding but also flash floods and coastal storms in urban areas. QBE Insurance, for instance, adjusts its flood risk assessments as new data becomes available, often leading to higher premiums.
According to the Insurance Council of Australia, factors driving these increases include updated flood mapping and changes in insurers’ risk appetites. As premiums face pressure from rising building costs, which have surged by about 40% since 2022, homeowners are feeling the squeeze. Interestingly, nearly 37% of a premium in New South Wales includes taxes.
Recent statistics show that by October 2025, the average insurance premium across Greater Sydney reached approximately $3,964. In some higher-risk areas like Hawkesbury City Council, premiums see a dramatic increase—more than double the city average due to flooding concerns.
Stephen Lau, a principal at Finity, highlighted that climate change is exacerbating risks in urban areas. Extreme weather events, including increased rainfall, are expected to become more frequent. “As the climate warms,” Lau noted, “we will see more intense and rapid extreme rainfall events.”
Dr. Andy Smith from Fathom, a flood risk intelligence firm, echoed these insights, stating insurers now possess better data to assess risks at a much more granular level. This could mean less risk in some areas, but greater risk in others where information previously lacked.
For Andrea, the situation shifted when her insurer informed her that her home’s storm rating had increased. Despite living blocks away from Botany Bay without any flooding incidents, her house insurance costs soared. Thankfully, she found a better option with another insurer for $5,056—still a significant saving.
The message here is clear: it pays to shop around. Each insurance provider assesses risks differently, and homeowners should actively seek the best rates while being aware that climate change may influence insurance costs for years to come.
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