Insurance against paying too much

With the cost of living increasing and inflation on the rise having an accurate understanding of outgoings is, in my opinion, critical and with this in mind I periodically evaluate mine. That means weighing up price increases and the value I receive for the additional cost (if any), the need for continuing to pay for that thing (goods and services) and other evaluations and I'm able to minimise my outgoings and be more economically viable; that little "health check" is insurance against being over-charged.

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Speaking of insurance, I recently had a glance at my household and contents insurance policies for my properties and was annoyed to see they had risen steeply.

For ease of use and to be time-efficient I have direct debits from my bank on a monthly basis to pay most recurring outgoings including my insurances and because it's set and forget the "health check" process is important because when premiums go up in cost it happens out of sight and if I was to miss the "increase notice email" then I'm unaware and that could mean paying more than I have to needlessly; the process is insurance against paying too much.

Something that's been going on here over the last ten or so years is price gouging, companies raising prices disproportionately against the Consumer Price Index (CPI). The graph below demonstrates it clearly over ten years with the dark blue line being the annual costs of house insurance in relation to the dotted line which is the CPI. Disproportionate right?

But let me put that in dollar terms on one of my on houses.

Currently, I pay $2,217.67 annually for house and contents insurance on the property, so $184.80 per month. Two years ago the same house and contents insurance policy on that house was $1,136.57 annually ($94.71 monthly) meaning it's increased by almost double and I have multiple policies so get group discounts; other's aren't so lucky.

They blame the rise on increasing occurrences of natural disasters, higher house values and repair costs and inflation of course. Yep, I get it...but it seems like price gouging to me and a lot of other people including many consumer-advocate groups who are calling for a national watchdog on the insurance industry.

I'm lucky to have the ability to pay for what I use including all my insurances like house, contents, vehicles, life, income and so on but many cannot and it's becoming increasingly difficult for people to pay for the basics...this is causing many people to drop what they see as non-essential spending and that means insurances. The problem is that many perceive there to be no real value in insurance until one needs it such as when health declines, a job is lost, the house burns down or there's a natural disaster and the house is damaged or destroyed, vehicle crashes and so on...that's when insurances become important. Without the correct insurance a person would be left in a world of pain should those things occur but if there's not enough money to pay...well, you see the quandry.

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I know so many people who seem almost afraid to review their financials out of fear of finding issues they cannot address but for me I think it's important to know so changes can be made and doing my "health check" process a couple times a year helps me gain some insurance against paying too much.

How do you see and find the issue in your location? Has the cost of insurance for things like house, contents, vehicle, life and income insurance caused you to scale back or terminate those insurances? How do you think being under-insured may affect you moving forward in the advent of an issue and how would you cope without insurance payouts in the advent of the worst happening?

Feel free to comment if you'd like to.