Unmet Need for Building, Home Contents and Comprehensive Car Insurance among Uninsured Australians: Survey Findings and Options for Reform

Abstract

Home contents and comprehensive car insurance are not legally mandated in Australia. With the exception of strata title properties, there is also no legal requirement for homeowners to purchase building insurance. While these insurance products are widely regarded as ‘essential’ for managing the risk of disasters and other unexpected events causing property damage, significant proportions of Australians lack these types of coverage. In this article, we examine the extent of unmet need for insurance among this group, who remain vulnerable to devastating financial losses despite the availability of social security and other safety nets in the disaster context and beyond. In doing so, we draw upon the findings of a survey of uninsured Australians whose limited financial resources indicate a high level of exposure to financial loss in case of emergencies causing severe property damage. By contrast to industry assumptions of limited interest in insurance among those without coverage, our findings suggest most uninsured Australians would prefer to have some cover if it was affordable. We examine law and policy reforms that could address such unmet need, arguing that direct subsidies for Australians on low incomes, perhaps supported by statutory recognition of insurance as an ‘essential’ service, would be the most effective means of improving premium affordability for this group.