The research, commissioned by CHOICE, Climate Council, Financial Counselling Australia, Financial Rights Legal Centre, and the Tenants’ Union of NSW, is based on a nationwide survey of home insurance policyholders, in-depth interviews with people affected by extreme weather events and interviews with key civil society groups.
This research revealed 5 key problems with the home and content insurance market:
1. Complex product design:
Home and contents policies are complex and difficult to compare across insurers, often leading to people being unintentionally underinsured.
2. Unaffordable premiums:
In recent months, 87% of policyholders have seen their premiums rise. Insurance unaffordability is worse in disaster-prone areas, and many households on low incomes have been priced out of the insurance market completely.
3. Inaccessible information on natural hazard risk:
Finding information on the level of risk to your home is very difficult, and the information that is available is piecemeal and often inaccurate.
4. Actions by homeowners to mitigate risk are not being considered by insurers:
44% of policyholders would consider investing in measures to lower the cost of their premium but many insurers do not recognise these kinds of measures when pricing policies.
5. Housing in high-risk areas needs solutions beyond insurance:
When homes are no longer insurable or safe to live in, governments need to plan for other solutions, including relocation.