Australians take casual attitude towards underinsurance

New research conducted by Mortgage Choice highlights the cavalier attitude Australians are taking towards insurance.

February 10, 2016

New research conducted by Mortgage Choice highlights the cavalier attitude Australians are taking towards insurance.

According to Mortgage Choice's inaugural Financial Confidence survey, one in every five Australians don't feel it is important to insure their vehicle.

When respondents were asked whether or not they had a form of car insurance, 21.6% of Australians said ‘no'.

More interestingly, of those surveyed in New South Wales, one in every three respondents said they did not have compulsory third party insurance. In New South Wales, compulsory third party insurance is not included in a vehicle's registration fee and must be purchased separately.

Mortgage Choice chief executive officer John Flavell said he was shocked to see that some Australians clearly consider insurance to be a ‘good to have' rather than a ‘must have'.  

“It is clear many Australians take a laissez-faire attitude towards insurance. They do not consider insurance to be essential and as such, don't think about insuring their vehicles or other assets,” Mr Flavell said.

“It really makes you wonder how many Australians don't have the right insurance policies in place for their personal situation.”

According to research conducted by the Financial Services Council*, one of the most important assets Australians forget to insure is their income, with the data showing just 31% of Australians have adequate income protection.

“While the majority of superannuation funds offer some level of income protection cover, this cover is often not adequate,” Mr Flavell said.  

“It is important for Australians to do their due diligence and make sure whatever income protection insurance they currently have is adequate. If it isn't, it is vital that they do something about it, before it is too late.”

“In the same way that it is important for Australians to properly insure their vehicle in the event that unforeseen circumstances arise, it is also vital for Australians to properly insure their income,” he said.

“A person's income is the biggest and most significant asset they will ever have, so it makes sense to protect it.

“There is a growing trend of underinsurance in Australia, which is simply not good enough. More education is needed to reverse this trend immediately.” 

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