The level of uninsured and under insurance is of increasing concern

The level of uninsured and under insurance is of increasing concern

2020 has certainly had a start many people will not forget in a hurry. While looking after bush fire claims, my own home and every other house in our street was smashed by hail. Both my children live in the same street and so we are all in the same boat. We also had 2 cars damaged; one a write off.

What is of increasing concern to me is the apparent increase in people who have no insurance. In our neighbourhood, we have two homeowners that I was speaking to as they were asking for help finding quality tradespeople, and both had no building or contents insurance. Both homes have to be worth around $3 million. They do not come from a country or culture where insurance was not trusted or common place. Just typical Aussies.

While working in Mallacoota we saw many properties that had no insurance, including a block of 8 town houses which was totally destroyed.

Then, we see cases of people with commercial or farm properties insured under direct home policies while the level of under insurance is likewise getting worse.

And yes before anyone writes, I confirm that I and the family are all fully insured we would never be otherwise.

This is a real problem for the industry and for government. I for one do not think that the tax payer or the public who continue to be very generous can continue to bail out those that elect not to insure.

Clearly the lack of trust in the industry is having an effect. Many people have reported having a bad experience and or the increasing cost of insurance has led them to carry their own risk: a risk they are clearly not able to carry.

A whole raft of issues come out of this. It is okay if you have a loss during a natural disaster but what if your home, business or farm is destroyed in a one off event. What help will you get then when it is not headline news.

All of us have only so much disposable income. There are thousands of charities in Australia doing wonderful work in a whole range of areas. If we see happen this year as we have in the past, their funds from donations will reduce putting their efforts under enormous strain as those that normally will support them have donated to the myriad of bush fire appeals.

We have seen from previous natural disasters that these types of events can push families into a state of poverty that they cannot get out of. This has an effect on multiple generations caught in this cycle of poverty. That is why I push so hard for all taxes to be removed from general insurance. It is in everyone’s best interest.

As an industry, how much premium is not being generated by all this? As we continue to throw out Insured’s in this hard market and or push up premiums by huge percentages, the issue is only going to get worse not better. What staggered me was that the level of non insurance increased in Brisbane after the Brisbane Floods of 2011 despite the extent of damage being in the headlines for so long. The bad press culminating with the industry as a whole getting the Lemon Award no doubt contributed.

It is something that really needs to be looked as seriously and addressed for the sake of insureds, the industry and the economy.

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