Rich Or Poor, 1.3m Run Risk Of No Home Insurance
Sydney Morning Herald
Tuesday January 22, 2002
One in six Australian households equivalent to the population of Perth - is without home insurance, despite the threat of natural and local disasters.
Against a backdrop of rising insurance costs and a messy corporate collapse, an NRMA Insurance survey found the bulk of the nation's estimated 1.28 million uninsured are tenants, house-sitters and low income earners.
Surprisingly, among those willing to live without an insurance safety net are some of the richest households in the country.
Denying that HIH's demise had eroded public confidence in the industry, NRMA Insurance, now called Insurance Australia Group, said yesterday there were various reasons why Australians did not take out insurance. Some said they had not got around to it; others thought it unnecessary; some did not believe their possessions were worth insuring.
Cost was also cited as a factor, but far from blaming rising premiums, Australia's largest general insurer used its survey results to renew its attack on a range of federal and state taxes which it said had inflated the cost of premiums by up to 44 per cent.
The survey of 1212 households was commissioned last October; after the September 11 attacks in the United States and HIH's collapse but before NSW's worst bushfire season in eight years.
It found that NSW had the lowest rates of contents insurance (89 per cent) and Victoria the highest (95 per cent). Home owners were more willing to insure than tenants. Fewer than 70 per cent of households earning up to $25,000 annually had adequate contents insurance.
Fifteen per cent of the country's highest income earners those earning more than $150,000 a year had no contents insurance.
NRMA Insurance's general manager of product and underwriting, Graeme Adams, said payouts from the Christmas bushfires and floods would not necessarily affect premiums. The insurer is processing 1683 claims.
In a separate assessment, the Insurance Council of Australia said probably one in five households that lost property in Christmas bushfires lacked insurance.
Its spokesman, Sandie Watson, said factors such as crime rates and the history of claims had far more bearing on premiums than a single emergency.
More reports Page 4
RISKY BUSINESS
Household To $25,000 $25,000- $50,000- $90,000-
$150,000+ Average
Income $50,000 $90,000 $150,000
Home has
contents 71% 80% 88% 89%
80% 81%
insurance
Home does
not have 26% 18% 10% 10%
15% 16%
contents
insurance
Can't say 3% 2% 2% 1%
5% 3%
Source: NRMA Insurance - 1,212 Households surveyed
© 2002 Sydney Morning Herald
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