After a challenging year spent rebuilding his home, McCarthy now faces another setback as his insurance premiums have skyrocketed.

According to the Australian Bureau of Statistics (ABS), insurance premiums have surged by an average of 11 per cent over the past 12 months.

“There must be a mistake here but no it was literally a 250 per cent increase year on year,” he told 9News.

“I guess just based on the fact we had some storm damage at our house and we had to make a small claim.

“It’s (now becoming) a choice of putting food on the table or paying your insurance.”

Experts have warned that premiums will only continue to rise, with millions of homes under threat of natural disasters like bushfires and floods.

“Home and contents insurance was the first essential item people stopped paying for when things get tough,” Australian Council of Social Service chief executive Cassandra Goldie said.

Pressure is building on the federal government to step in before the upcoming election after a senate inquiry late last year made a number of recommendations for the Australian Competition and Consumer Commission to monitor prices and push premiums down.

Insurance Council of Australia Executive Director Andrew Hall recommended shopping around for a better deal.

He suggests that homeowners should reach out to their insurer to enquire about payment plans and consider increasing their excess in order to reduce their premiums.