Natural disasters force Australians to ditch home insurance

Natural disasters force Australians to ditch home insurance | Insurance Business Australia

Property

Natural disasters force Australians to ditch home insurance

Tips offered to those seeking to reduce premiums

Property

By
Roxanne Libatique

Two in five Australians affected by natural disasters are left with no choice but to ditch their home insurance amid the rising cost-of-living in the country, according to financial comparison site Mozo.

Mozo’s latest research found that Australians with home insurance currently pay $316 more on average than they did last year, with more than half of the respondents (62%) sharing they felt “out of control” with their expenses as the average annual cost of home insurance premiums totals $1,460 annually.

“The amount of Australians that have resorted to cancelling their home insurance because they can’t afford it is shocking,” said Mozo money expert Rachel Wastell. “But what’s more concerning is many are likely paying these rising premiums without realising they’re underinsured.”

Insurance issues in disaster-prone areas

Among the respondents who cancelled their home insurance policy in the last 12 months “because it got too expensive”, two in five (39%) were living in areas affected by natural disasters.

Australians living in bushfire-prone areas were most likely to see an increase in their insurance premiums (42%), followed by those in areas impacted by floods (32%). Meanwhile, those living in areas impacted by rising ocean levels were more than twice as likely to have cancelled their home insurance policy than those in unaffected areas, with a 40% rise in premiums on average.

“If you’re living in a natural disaster affected area, and you’re paying for home insurance, you should double check that you’re fully covered. The cost of construction has skyrocketed over the past five years, so if you haven’t reviewed your existing levels of cover, look at what insurers call the ‘sum insured’ before the bushfire season takes hold,” Wastell said.

Choosing a home insurance policy

Mozo advised Australians who are feeling “out of control” with their expenses to review their current policy and provider to cut costs.

Other ways to reduce home insurance premiums include:

increasing the excess to reduce how much you are paying;
buying a policy online to save on home insurance premiums and looking out for multi-policy discounts;
increasing home security features; and
paying home insurance premiums annually to get a discount.