In 2004, consumers responding to ASIC’s ACT bushfire survey, 2004, found that the level of under-insurance in Australia is high. Data collected found that in Australia:
- Between 27% and 81% of consumers were underinsured by 10% or more
- In 2005, the Australian Securities & Investments Commission, issued a report titled “Getting Home Insurance Right”. Within this report, ASIC concluded that many insurers now help consumers estimate rebuilding costs by using web-based calculators.
- The report went on to Road Test these web-based calculators, to see how accurate and similar they were to each other.
- ASIC reviewed the calculators offered by nine major insurers in the course of this report, and compared figures they produced for the sum insured for five different properties.
- ASIC found that there were significant inconsistencies in the figures generated by these web-based calculators. The largest gap recorded was some 125% between the lowest and highest estimate.
- In other words the highest estimate was more than two times the lowest estimate for the same house in the same location.
In 2006, two major insurers independently estimated that around:
- 15% of households do not have home building insurance
In 2007, CPR Insurance Services, finalised a report based on CGU insurance that found:
- 83% of businesses have inadequate building insurance
- 15% do not adequately insure Plant & Machinery
- Many Businesses fail to take into account their fixtures and fittings, particularly when updating them
In 2012, Life Insurance Finder, noted that under-insurance is common in Australia. It concluded that:
- Australia belonged to one of the most under-insured nations
- Surveys and studies have shown that a great number of Australians have insufficient cover whether it is home, business, or life insurance
- It found that parents with dependents under them are surprisingly underinsured by $1.30 trillion – such a staggering figure.
- The area of Home Contents/Building insurance where under-insurance occurred was a staggering 77%
Posted by Canstar Research on 04/01/2013
e Insurance Council of Australia estimates that more than 40% of households fail to correctly assess the value of their home.