Cash settlements on home insurance claims leaving vulnerable Australians short-changed, Asic says
Guardian AU
β’Sun, 30 Aug 2026 15:01:00 GMT
π° What Happened
Australia's corporate regulator Asic released a report finding home insurers are overwhelmingly paying cash to settle claims rather than managing repairs or rebuilding, after reviewing a sample of home building insurance claims from Cyclone Jasper, which hit far north Queensland in December 2023. Cash settlements were used in more than 63% of final claims reviewed, with IAG and Allianz each using cash in over 80% of cases, and most offers were based on a single quote from insurers' preferred builders. Asic commissioner Alan Kirkland warned that homeowners are left to find tradespeople, oversee repairs and pay for unexpected costs out of their own pocket, saying 'the easy option for insurers can be the expensive one for homeowners'.
π The Backstory
The review follows earlier Asic action this month telling car owners to challenge steep premium rises, and complaints about home building insurance have returned to highs not seen since 2022-23. Home insurance premiums rose 51% in the five years to October 2025, and the Insurance Council of Australia says extreme weather now generates about $4.5bn in claims a year on average in the 2020s as the climate crisis nearly triples insurers' total costs.
π― Why It Matters
For Australian homeowners, the report means a cash payout from an insurer may not actually cover the cost of repairs, leaving disaster victims short-changed. It raises the prospect of regulatory pressure for fairer settlement practices, and is a signal to consumers to scrutinise cash settlement offers rather than accept them at face value.
Australia's corporate regulator Asic released a report finding home insurers are overwhelmingly paying cash to settle claims rather than managing repairs or rebuilding, after reviewing a sample of home building insurance claims from Cyclone Jasper, which hit far north Queensland in December 2023. Cash settlements were used in more than 63% of final claims reviewed, with IAG and Allianz each using cash in over 80% of cases, and most offers were based on a single quote from insurers' preferred builders. Asic commissioner Alan Kirkland warned that homeowners are left to find tradespeople, oversee repairs and pay for unexpected costs out of their own pocket, saying 'the easy option for insurers can be the expensive one for homeowners'.
The review follows earlier Asic action this month telling car owners to challenge steep premium rises, and complaints about home building insurance have returned to highs not seen since 2022-23. Home insurance premiums rose 51% in the five years to October 2025, and the Insurance Council of Australia says extreme weather now generates about $4.5bn in claims a year on average in the 2020s as the climate crisis nearly triples insurers' total costs.
For Australian homeowners, the report means a cash payout from an insurer may not actually cover the cost of repairs, leaving disaster victims short-changed. It raises the prospect of regulatory pressure for fairer settlement practices, and is a signal to consumers to scrutinise cash settlement offers rather than accept them at face value.