What is an insurance premium?

An insurance premium is the total amount you pay to insure your belongings for your chosen level of cover. It is calculated by applying a range of factors that are unique to your individual policy. Even if your individual circumstances have not changed, your premium is likely to change every year.

How is my RACQ Insurance premium calculated?

Ever wondered how your insurance premium is calculated? You’re not alone. We are often asked by members what factors contribute to the price of their insurance cover, so we’ve put together some information to help illustrate how your insurance premiums are calculated.

Your individual circumstances

  • Your age, gender and driving history are factors that affect your premium and can include things like whether you’re new to driving or have recently had multiple claims
  • Living in an area prone to severe weather or an area that has an increased rate of theft or claims for other insured events
  • Visit the Insurance discounts page and the applicable PDS and/or SPDS for more details.

Details of the item/s insured

  • Your vehicle make, model and year of manufacture
  • Construction materials and other characteristics unique to your property, including the resilience of the materials used to build your home
  • The age of your home

Nominated cover

  • The sum insured amount you’ve nominated to cover the cost of your insured asset^
  • The type of insurance coverage you have chosen – for example, comprehensive vs third party insurance for Motor Vehicle Insurance
  • Optional extras added to your policy outside of the standard coverage
  • Your nominated claims excess
  • Whether you choose to pay by the month or pay annually

^At your policy renewal, we automatically increase your home sum insured to help protect you against the effects of increasing costs and inflation. You can ask us to increase or decrease your home sum insured at any time and it is important to check that your sum insured is adequate and that you are not over or under-insured. Tools such as the building insurance and contents insurance calculators on our Insurance page can help you estimate what it would cost to replace your home building or contents.

External factors and market forces

  • Government taxes, duties, and levies applicable to your insured asset.
  • Accessibility of trades, repairers, and materials in your insured area. Trades and repairers are usually more accessible in metropolitan areas and can become sparse when a significant or catastrophic event occurs.
  • Alongside the cost of trades, the cost to complete the repairs including materials can impact premiums. For example, stock shortages due to impacts from COVID, has increased the wholesale costs for these items, resulting in higher costs along the value chain.
  • Weather patterns and high-risk adverse weather zones.
  • Where there is a confirmed change in how our members are using their assets which changes the risk, we may change the premium to reflect this. 

Private vs Business use

  • Privately used assets reflect day to day usage commonly experienced by Queensland families, whereas premiums calculated for business use factor in that the primary use of the vehicle may be to service their business and therefore poses a higher insurance risk.

Why has my insurance premium increased more than I expected?

RACQ, like other insurers, adjusts prices from time to time due to the range of factors that impact how your premium is calculated.

We are experiencing an increase in the cost of building claims and reinsurance costs due to the volatility and unpredictability of Queensland weather, particularly in relation to hail events. Premium increases help ensure the protection we offer our members can be sustainably provided both now and into the future, where any change in the climate remains unpredictable.

What can I do to manage my premium?

There are a range of ways you can manage your premium:

  • If you do not make a claim in a prior 12 month period, you may be eligible for a no claim discount (excluding pet insurance)
  • Nominating an excess that suits your individual needs
    • Increasing your excess will reduce your overall premium, however you may incur a higher cost if you lodge a claim
    • Decreasing your excess will increase your overall premium however will lower your out-of-pocket costs when you lodge a claim
  • Review your optional extras and ensure your extras are still suitable to your needs
  • Check your nominated sum insured or agreed value amount is right for you


Did you know insurance companies need insurance as well? This is called reinsurance.

When a severe weather event hits Queensland, the costs to help our members recover can be significant and reinsurance supports us in supporting our members through these events.

Reinsurance is factored into each policy with RACQ, and ultimately means we can continue to sustainably function as a business and support our members now and into the future.

Things to note

Insurance products (excluding Travel Insurance) are issued by RACQ Insurance Limited ABN 50 009 704 152 (RACQ). Conditions, limits and exclusions apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the PDS and any applicable Supplementary PDS before making a purchase decision on this product. You can also access our Target Market Determinations on this website.