3% Downgrade or Drop Their Policies Completely, Leaving Many Vulnerable
In an effort to reduce expenses, approximately 20% of Australians with home insurance have switched their policies over the past two years, according to a recent survey.
The survey, conducted by Finder and including 1,071 respondents, revealed that out of 636 homeowners with insurance, 9% opted for better coverage. Alarmingly, 3% either downgraded or completely dropped their policies, putting nearly 370,000 Australians at risk of financial hardship in the event of a disaster.
The survey also found that 47% of policyholders automatically renewed their insurance plans, potentially missing out on substantial savings. This is significant as 68% of Australians reported an increase in their home and contents insurance premiums over the past year.
Tim Bennett, an insurance expert at Finder, highlighted the difficult decisions Australians are making between maintaining adequate insurance coverage and managing other financial commitments.
“Foregoing insurance could result in severe financial consequences if accidents or weather-related damages occur,” Bennett warned.
Over the past year, the median home and contents insurance premium has surged by more than 19%, reaching a record high of $2,434.
Despite the rising costs, Bennett stressed the importance of home insurance as vital financial protection. He advised policyholders against automatic renewals, suggesting that shopping around for better deals could yield significant savings. For example, there is a $2,865 difference between the cheapest and most expensive annual policies for homes valued at $600,000.
“The family home represents the largest financial asset for many Australians, so insurance should not be neglected,” Bennett concluded.
