Canberra has a higher rate of under-insurance than the national average, according to surveys done since the January 18 fires
The fires have spurred some Australians into insuring or upgrading their insurance of their home and contents, but under-insurance and no insurance remains rife.
Twenty-five per cent of Australians who had home buildings insurance believed their insurance would not cover the full cost of rebuilding their home if it burned down. And 29 per cent of Australians with contents cover believed their policies would not cover the full cost of replacement if their home were destroyed by fire.
But Canberra has a worse rate for buildings.
Forty-four per cent of Canberra residents with home buildings cover are aware their insurance would not cover the full cost of rebuilding their home if it burned down.
It may be that the fires have made Canberrans aware of spiralling building costs, but they have not got around doing anything about it. Maybe they are waiting for their policy renewal notices.
Canberrans are slightly better than the national average with contents. Twenty-five per cent of Canberra residents with contents cover do not believe their insurance would cover the full cost of replacing their belongings.
Forty per cent of Canberra residents have not updated their home or contents insurance in the past twelve months.
Nationwide absence of insurance remains a problem. Eighteen per cent have no home or contents-related insurance and 10 per cent of people who live in bushfire-prone areas have no home or contents insurance. Forty-eight per cent of people who rent have no insurance and 29 per cent of people under 35 have no insurance.
Canberra is marginally better with only 16 per cent without insurance.
The figures come from surveys done by Sweeney Research sponsored by AAMI insurance. The survey was of 1200 people, excluding Western Australia and the Northern Territory.
AAMI was the insurer of 43 people whose homes were destroyed on January 18.
The most common reasons given for being underinsured (home buildings) included:
• “I haven’t got around to updating my policy.”
• “It’s too expensive.”
• “House prices keep going up.”
AAMI public affairs manager Geoff Hughes said it was disturbing that a quarter of Australians deliberately underinsured their homes.
“One in five Australians remains uninsured and risks losing everything if their home were destroyed by fire,” he said. “A common reason given for being underinsured is that home insurance is simply too expensive. This perception is due in part to the high level of State Government fees and charges imposed on policyholders, including the Fire Services Levy charged in NSW and Victoria.”
Hughes said that even with government charges, home insurance was affordable. His company’s premiums for $200,000 building insurance and $50,000 contents insurance were $206 and $158 for Gowrie (ACT).
Government levies range fro 20 to 40 per cent of the premium.
The survey said 86 per cent of Australians thought Fire Services Levies should be paid by all property owners, not just those with insurance. Only four per cent thought only policyholders should pay the levy. The rest did not know there was a levy.
The most common reasons why all property owners should pay the Fire Services Levy included:
• “It is a fairer way of sharing the costs.”
• “Fires can occur anywhere.”
• “Fire brigades go to all properties, not just those which are insured.”