A recent survey has revealed that nearly one in five Australians have switched their home insurance policy in the past two years to cut expenses. However, alarmingly, 3% have downgraded or entirely dropped their coverage, potentially leaving themselves financially vulnerable.
The Finder survey, which included 1,071 respondents, found that out of 636 home insurance policyholders, 9% switched to better coverage. Meanwhile, the 3% who downgraded or dropped their policies represent almost 370,000 Australians at risk of financial hardship in the event of a disaster.
The survey also highlighted that 47% of policyholders auto-renewed their plans, potentially missing out on significant savings. This finding is particularly concerning as 68% of Australians reported an increase in their home and contents insurance premiums over the past year.
Insurance expert Tim Bennett from Finder pointed out the difficult choices Australians face between maintaining adequate coverage and managing other financial obligations. He cautioned that dropping insurance could lead to severe financial consequences if accidents or weather-related damages occur.
The median home and contents insurance premium has surged by over 19% in the past year, reaching a record high of $2,434. Bennett stressed the importance of home insurance despite the rising costs, noting that it provides crucial financial protection.
Bennett advised against automatic renewals, recommending that homeowners shop around for better deals. He highlighted that significant savings are possible, citing a $2,865 difference between the cheapest and most expensive annual policies for homes valued at $600,000.
“The family home is the largest financial asset for many Australians, so insurance must not be overlooked,” Bennett concluded.
