Report on home insurance affordability reinforces need for national review, prioritising people experiencing financial disadvantage

Today’s report

released by The Actuaries Institute on home insurance affordability reinforces ACOSS’ calls for a national review of affordable and accessible home insurance. Such a review must prioritise a focus on specific supports for people experiencing financial disadvantage.

The report shows that home insurance is already unaffordable for more than 1 million households and will become prohibitive because of climate change impacts already locked in.

ACOSS Acting CEO, Edwina MacDonald said

“People on low incomes are impacted first, worst and longest by extreme weather events.

“Lower-cost housing, including rental properties, are often in areas that are more exposed to extreme weather. This leaves people on low incomes with fewer choices of where to live whilst also being without the financial means, or control if they rent, to mitigate risk.

“From the 2019/20 bushfires to the series of floods that have occurred across the country since, we have heard too many stories of the many people on the lowest incomes who couldn’t afford insurance and have now lost everything with no financial means to recover. Many are at risk of falling into poverty, have their poverty entrenched or ending up homeless.

“With catastrophic and unpredictable extreme weather events increasing in all regions across Australia, we need to do things differently when it comes to insurance, and we must find specific ways to support people and communities experiencing financial disadvantage.

“Insurance must be treated as an essential service. Government natural disaster planning relies on individuals purchasing appropriate insurance for their home, contents and vehicles.

“Subsidies to reduce insurance costs, improve building standards and, where necessary, support relocation for people on low-income will be critical. Investment in infrastructure to reduce risk, better land use planning, and avoiding development in high-risk areas must also be prioritised.

“Fixing insurance is only part of the solution for supporting people at times of extreme weather events. We must also develop comprehensive disaster resilience plans, establish local community-led Community Resilience Hubs, increase support for the community sector, and provide adequate incomes, including increasing JobSeeker and disaster payments, to give people a fighting chance to adapt, respond, and recover.”

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