New report shows that home insurance is unaffordable for more than 1 million households
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A new report from The Actuaries Institute shows that home insurance is already unaffordable for more than 1 million households and will become prohibitive because of climate change impacts including extreme and unpredictable weather conditions.
The Australian Council of Social Service is a national advocate supporting people affected by poverty, disadvantage and inequality, and the peak council for community services calls for a national review of affordable and accessible home insurance, focusing on specific support for people experiencing financial disadvantage.
This means that those individuals on low incomes living in lower-costing housing, including rental properties are often impacted first, worst and longest by extreme weather conditions like the 2019 and 2020 bushfires and floods.
People who can’t afford insurance lose their homes and belongings with no financial means of recovering. Losing your home can have a domino effect on many things and put people at risk of falling into poverty.
“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.” said ACOSS Acting CEO, Edwina MacDonald.
MacDonald also believes that insurance should be treated as an essential service with subsidies that reduce insurance costs, improve building standards and, support relocation for people on low incomes or in low-cost housing.
“Fixing insurance is only part of the solution for supporting people at times of extreme weather events.” MacDonald said.
“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.”
Current government natural disaster planning relies on people purchasing proper insurance for their homes, belongings and vehicles which isn’t feasible for everyone.
Menchie Khairuddin is a writer Deputy Content Manager at Akolade and content producer for Third Sector News. She is passionate about social affairs specifically in mixed, multicultural heritage and not-for-profit organisations.
