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Why millions of Australians need to check their home insurance now | Finder

AUFHO - Stats News FI

Finder research shows nearly 5 million Australians may be putting their homes at risk by not checking their insurance.

Our new study found that 54% of home insurance customers – equivalent to 4.87 million people – haven't updated the value of their properties in the past 12 months.

Inaction on home insurance is a risk at any time.

But with inflation spiking construction costs, it's only likely to make underinsurance worse.

Being underinsured is when you don't have enough coverage in the event you need to make a claim.

It could mean you're hundreds of thousands of dollars out of pocket if you had to rebuild your property after a flood or storm.

More than half don't understand their insurance

Finder's new research shows most people don't fully understand the benefits and inclusions of their home and contents insurance policies.

Almost 1 in 10 (8%) policyholders aren't clued up at all. A further 48% only understand their benefits partially.

Overall, less than half (43%) of those with home insurance actually know what they're covered for.

What's behind the apathy?

Paula Jarzabkowski, an expert in insurance crises, commented: "Many people haven't tied together the fact that costs of construction have increased due to supply chain problems.

"And, because of the massive rebuilding going on right now, it makes labour and materials scarce and expensive."

Learn about the key actions you can take to avoid being underinsured.

Even despite awful flash flooding dominating the news in many parts of the country, people are hesitant to take action on their policies.

Jarzabkowski, a professor of strategic management at The University of Queensland, said people tend to have "short memories" after a crisis.

But Jarzabkowski said the aftermath of devastating events is exactly when action is most needed.

"You can stimulate behavioural change because it's present in the mind," continued Jarzabkowski.

"You need to create changes in the way people think about their insurance right after a disaster."

However, in many areas including places hit by floods in recent months, Australians aren't finding much help from home insurance.

Speaking of those affected by the flooding, Jarzabkowski added: "Insurance is like a 'bad boyfriend' to them.

"If it wasn't there for them at the time of a disaster, that will make them reluctant to even consider it in the future."

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