Australia’s home insurance market is undergoing its biggest transformation in decades.Premiums in 2024–2025 have risen sharply across Sydney, Perth, Melbourne and Brisbane, with insurers warning that coastal, waterfront and architectural homes are now among the highest-risk residential properties in the country.

For high-value homeowners in Vaucluse, Mosman, Dalkeith, City Beach, Toorak, Brighton and Bellevue Hill, this shift is even more dramatic — and often dangerous.

Luxury homes are now the most underinsured category in Australia, yet they are also the most expensive to rebuild.

This is why specialist luxury home insurance, not retail cover, has become absolutely essential in 2025.

The 2025 Problem: Luxury Homes Are Being Underinsured by Millions

Construction costs have increased between 18% and 41% depending on the suburb.High-net-worth homes in:

• Vaucluse / Dover Heights

• Point Piper / Rose Bay

• Mosman / Clontarf

• Dalkeith / City Beach / Cottesloe

• Toorak / Hawthorn / Kew / Brighton

…now cost far more to rebuild than retail insurers estimate.

What’s happening right now:

• Homes valued at $8M are insured for $4M.

• Waterfront estates costing $12M+ to rebuild are insured for $6M.

• Architectural homes needing unique materials are undervalued by 30–60%.

This is the biggest financial risk facing prestige homeowners in 2025.

Why This Year’s Insurance Market Hits Prestige Suburbs the Hardest

1. Coastal Exposure Has Become a Priority Risk

Suburbs like:

• City Beach

• Cottesloe

• Vaucluse

• Clontarf

• Brighton

• Palm Beach

…face higher premiums due to:

• storm surges

• salt corrosion

• wind-driven rain

• erosion of clifftop foundations

Retail insurers now place strict limits on these risks.

2. Architectural & Designer Homes Are Too Complex for Retail Cover

Luxury homes often include:

• full glass façades

• imported stone

• engineered steel structures

• designer kitchens

• custom joinery

• premium pools and spas

• smart-home systems

Retail insurers simply cannot price these correctly.

Only prestige insurers can.

3. Waterfront Mansions Carry New Flood Classifications

Homes in:

• Rose Bay

• Point Piper

• Mosman Park

• Dalkeith

• Brighton

• Hunters Hill

…now fall under new flood and surge risk tiers.

Standard policies exclude or cap these protections.

4. Heritage Zones Are Being Reclassified

Parts of:

• Bellevue Hill

• Hawthorn

• Toorak

• Kew

• Hunters Hill

…now require heritage restoration standards during rebuilds.

This dramatically increases rebuild cost.

Retail insurers do not include heritage compliance.

2025: The Year Prestige Homeowners Switch to High-Net-Worth Policies

As the insurance market tightens, high-value homeowners in elite suburbs are moving toward specialist insurers such as:

• Chubb Masterpiece

• Allianz Premier

• Quantum Elite

• Prevail Prestige

• Blue Zebra Platinum

• Castle High-Net-Worth Home

• CGU Prestige

These insurers understand the true rebuild cost of:

• luxury waterfront estates

• clifftop architectural homes

• heritage mansions

• multi-level coastal villas

• designer homes with imported finishes

Luxsure works directly with these insurers — giving clients access to underwriting unavailable to the general public.

What Luxsure Provides in 2025 That Standard Insurers Do Not

✔ Unlimited or Extended Replacement Cover

Crucial for $5M–$50M homes.

✔ True Waterfront & Coastal Protections

Specific to Vaucluse, City Beach, Cottesloe, Mosman, Brighton.

✔ High-Value Contents Protection

Jewellery, art, watches, wine cellars, sculptures, antiques.

✔ Accidental Damage Included as Standard

✔ Luxury Outdoor Asset Cover

Tennis courts, pavilions, saunas, jacuzzis, pools, landscaped gardens.

✔ White-Glove Claims Handling

✔ Specialist Risk Assessment for Each Suburb

Risk varies dramatically between:

• cliffside Vaucluse

• bayfront Brighton

• riverfront Dalkeith

• architectural Toorak

• coastal City Beach

We price each risk separately from scratch.

Across Australia

NSW High-Risk Luxury Suburbs

• Vaucluse

• Dover Heights

• Bellevue Hill

• Mosman

• Clontarf

• Point Piper

• Rose Bay

• Double Bay

• Palm Beach

WA High-Risk Luxury Suburbs

• Dalkeith

• City Beach

• Cottesloe

• Swanbourne

• Peppermint Grove

VIC High-Risk Luxury Suburbs

• Toorak

• Brighton

• Hawthorn

• Kew

• Balwyn

• Canterbury

• 
  

These are the exact areas where insurance companies are tightening policies — making specialist cover crucial.

2025 Conclusion: If You Live in a Prestige Suburb, You Cannot Rely on Standard Home Insurance

The combination of:

• rising premiums

• record rebuild costs

• climate volatility

• stricter underwriting

• risk reclassification

• luxury home complexity

…makes 2025 the most important year yet for homeowners in elite suburbs to upgrade to specialist cover.

A luxury home deserves luxury insurance — and only Luxsure delivers that level of protection.

Get a Private, High-Net-Worth Insurance Assessment Today

Luxsure specialises exclusively in homes valued $3 million to $50 million+ across Australia’s prestige markets.

We evaluate:

✔ your suburb

✔ your property type

✔ your rebuild cost

✔ your waterfront/coastal exposure

✔ your contents value

✔ your architectural complexity

And we match you with Australia’s leading prestige insurers.

Protect your home properly. Protect it with Luxsure.

Get your quote today!