For the second quarter in a row, consumer advocacy group CHOICE had seen record numbers of Australians concerned about home insurance costs.
The CHOICE Consumer Pulse June 2022 report is based on a survey of 1,083 Australian households, with the data weighted to ensure it represents the Australian population based on the 2016 ABS Census data for age, gender, household income, and education levels because the 2021 Census raw data was unavailable at the time of analysis. Fieldwork was conducted from June 13 to 28, 2022.
The report found that 64% of Australians were “very concerned” or “quite concerned” about home insurance costs. With the catastrophic flooding in Queensland and New South Wales (NSW) early this year, which was Australia's costliest flood and third-costliest natural disaster, many consumers are now worried about insurance affordability.
“Almost two in three people have expressed concern about the cost of home insurance, with 28% of people very concerned about the cost. With devastating floods in recent memory, affordable access to home insurance is front of mind for many consumers,” said CHOICE insurance campaigner Dean Price.
Bruce Robertson, owner of a flood-prone property in the mid-north coast region of NSW, shared with CHOICE that he paid around $2,000 a year on his home insurance premium, with flood cover included. However, two years ago, the price increased to $18,000 per year overnight – forcing him to drop his coverage.
“I'm really unhappy about it; it doesn’t give me a good feeling not being insured. You do feel uneasy, and you do feel exposed. It's a big asset; if you lose that, it would have a huge impact on our lives and our kids' lives,” Robertson said.
Finity's latest report for the Actuaries Institute pointed to climate change as the main culprit of rising insurance premiums, with the Australian insurance industry seeing increased losses from extreme weather events over the last 10 years. This aligns with Mozo's latest report, revealing that 49% of Australians believe that climate change's impacts have been driving up insurance premiums.
Meanwhile, Price noted that home insurance premium costs have increased by 72% over the last five years across the country, with West Australians taking the biggest hit because the average quote in their area rose by 101% over the same period.
“Some people are forgoing flood insurance if they can't afford it, while others have little choice but to leave their property under-insured or uninsured. This leaves people in a very vulnerable situation,” Price said. “Extreme weather events are going to continue to increase in frequency and devastation. Across Australia, it's going to be more challenging for people to access affordable and appropriate insurance. The new Federal Government has an opportunity to investigate solutions to help people doing it tough across the nation.”