Fears many Australians will abandon home insurance as premiums jump 50% in high-risk areas
The Actuaries Institute's recent research on home insurance affordability and its link to climate disasters has highlighted significant concerns in Australia.
The study shows a disturbing trend of rising home insurance premiums, particularly in high-risk areas
This surge in premiums has led to potential financial distress for many households, with some even considering abandoning home insurance altogether.
The report reveals that median home insurance premiums across all areas have risen by 28% in the year leading up to March, reaching an average of $1,894 across all states.
high-risk regions, such as flood-prone areas, premiums have surged by a staggering 50%.
This increase is the most substantial observed in two decades, prompting worries that households might forgo insurance coverage due to unaffordable costs.
A notable finding is that nearly 1 in 8 Australian households (1.24 million) are categorized as "affordability stressed,"
meaning they spend over four weeks' worth of their annual income on home insurance premiums.
These households are often in a lower socioeconomic bracket and reside in regional areas, making it challenging for them to afford the heightened insurance costs.
these stressed households are spending approximately $4,000 annually on insurance, more than twice the average amount.
The research identifies the northern rivers region of New South Wales as one of the hardest-hit areas, with a high occurrence of floods in the past year.
Other areas facing significant stress include North Queensland and Western Australia, primarily due to their susceptibility to cyclones.
households would collectively need $1.5 billion in flood insurance premiums if fully insured
ongoing efforts to reduce underlying risks and increase investment in disaster prevention and mitigation projects. - Assistant Treasurer and Minister for Financial Services Stephen Jones