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Homeowners in Dargan, perched on the edge of the Blue Mountains and bordering the Hawkesbury, are facing a sharp new reality, insurance premiums that have surged by more than 50 per cent in five years.
According to data from analytics firm Finity, the average cost of home insurance across Australia has climbed from $1,940 in 2020 to $2,938 last year, a 51 per cent increase. In high-risk regions such as Sydney’s outer west and the Blue Mountains, average annual premiums are now sitting above $5,300.
For Dargan residents Paul and Denise Cameron, the rise has been personal.
The couple built their home just months before the Black Summer bushfires tore through the region. Flames came within metres of their property.
“The fire came right up to the front of the house and took out a few of the trees,” Mr Cameron said. “We were lucky it went around us rather than straight through as it did at the other end of the street.”
In 2019, insuring their home cost $2,603 a year. Today, it costs $5,071 even after long-standing loyalty discounts. Several insurers declined to cover the property altogether.
“When I went to several companies, they wouldn’t insure us at all up here,” Mr Cameron said. “We only really had one option.”
Climate risk driving price spikes
Finity principal Stephen Lau says the spike reflects growing exposure to climate-driven disasters and sharply rising rebuilding costs.
Insurers processed around 300,000 claims from the 2022 floods alone, putting pressure on labour and materials. Nationally, extreme weather has cost insurers more than $25 billion since 2020.
Homes in bushfire-prone, flood-exposed or storm-affected areas are attracting the steepest premiums and parts of the Blue Mountains and adjoining Hawkesbury districts sit squarely in that risk profile.
Resilience Building Council offers a pathway forward
Now, a growing push for resilience-based building upgrades is offering some hope.
The Resilient Building Council (RBC), led by CEO Kate Cotter, works with homeowners to reduce disaster risk through practical retrofits and design improvements.
The council provides free resilience assessments and assigns homes a star rating from one to five, based on their ability to withstand hazards such as bushfire, flood and storm.
“For bushfires, there are lots of small actions you can take ember screens, clearing flammable materials, protecting vents,” Ms Cotter said.
“For storms, it might mean strengthening roofing or protecting windows. For flood, we can look at materials and structural reinforcement so homes don’t suffer catastrophic damage.”
Crucially, insurers are beginning to recognise those upgrades in their pricing.
After submitting photographs and documentation to the RBC, the Camerons received certification acknowledging their home’s fire-resistant features including non-combustible cladding and thoughtful landscaping.
Their insurer ultimately reduced their annual premium by about $500.
“It took a bit of back and forth,” Mr Cameron said. “But they did take it into account.”
A growing protection gap
Despite such efforts, affordability remains a serious concern.
The Actuaries Institute estimates 15 per cent of Australian households cannot afford home insurance a figure Ms Cotter fears will grow without urgent adaptation measures.
“The trajectory is only going in one direction unless we adapt our buildings and reduce risk at the community level,” she said.
The Blue Mountains Council area, including Dargan, shares strong environmental and economic ties with neighbouring Hawkesbury communities. Both regions are increasingly exposed to bushfire and flood extremes and both are feeling the insurance squeeze.
Industry bodies say insurers and governments are exploring public-private partnerships and mitigation funding to narrow what is being called Australia’s “protection gap”.
For Dargan residents, the issue is immediate and practical.
“We built with fire in mind,” Mr Cameron said. “You do what you can to protect your home. But at the end of the day, you still need insurance and you still have to be able to afford it.”
As premiums continue to rise across the Blue Mountains and Hawkesbury fringe, resilience may prove not just a safety measure but a financial lifeline.
This story contains information originally published by ABC Business Reporter Adelaide Miller 23 February 2026.
