Two of the nation's biggest insurers are cutting premiums for Australians who use the Bushfire Resilience Rating Home Self-Assessment App.
It's free and designed to measure how vulnerable a home would be in a bushfire, with higher resilience ratings meant to translate to higher savings.
People living in the highest-risk areas can still save up to $500, according to the Resilient Building Council.
Premium hikes have attracted significant attention in recent months, with several insurers attributing rising prices to the cost of paying out after natural disasters.
On Thursday, NRMA Insurance and Suncorp Group revealed they will offer discounts for houses that have a rating of three stars and above on the app.
There are hopes banks and other insurers will follow suit.
Resilient Building Council chief executive Kate Cotter said the assessment took about 20 minutes to complete and came with an action plan of ways people can improve their rating.
"There are lots of simple, low-cost things people can do themselves right away and as everyone starts taking action, Australia will be better prepared and better off," Ms Cotter said.
It would arm Australians with the tools they need to protect themselves, Suncorp consumer insurance chief executive Lisa Harrison said.
"Insurers play a huge role in getting homeowners and communities back on their feet after a bushfire, and we know being prepared gives the best chances of lessening the physical and emotional impacts," she said.
NRMA Insurance chief executive Julie Batch was buoyed by early take-up of the app and hoped the new incentive would encourage more customers to improve their homes' bushfire resilience.
Federal Emergency Management Minister Murray Watt said it was an example of reducing climate and disaster risk that led to financial benefits for households.
"Not only are people making their home and community safer but the program is helping to reduce insurance costs for users," he said.
