The proportion of Australian Home Owners holding a Household Insurance policy has declined from 92.2 % in 2008 to 90.1% in 2012.
The proportion of Australian Home Owners holding a Household Insurance policy has declined from 92.2 % in 2008 to 90.1% in 2012. These are the latest findings from Roy Morgan Research’s General Insurance Industry Report based on personal interviews with over 9,000 Household Insurance customers each year.
The incidence of Household Insurance is largely dependent on Household Income, with the lowest being the under $15,000 pa households (83.9%) and the highest is the $100,000+ pa group with 93.7%. However, the decline in household insurance is across all Household Income Groups.
Though the majority of Household Insurance policies are automatically renewed without approaching other insurers, the trend to shop around prior to policy renewal is on the increase. In the 12 months to August 2012, 14% of households approached another company prior to renewal compared to 10% in 2008.
This increased trend to compare price before renewal is an indication that policy holders are increasingly price sensitive and as a result, some are deciding not to insure. More than half of all policy holders that shop around before renewing do so because of price.
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“It should be of concern to the insurance industry and the government that there is a trend for home owners to drop out of insuring.
“Rising premiums and natural disasters including floods in particular have received bad publicity regarding coverage and the definitions used by the industry have created a negative environment.
“The increasing trend for people to shop around at renewal time is a positive competitive trend providing consumers are aware of any change in terms and conditions.”
Source: Roy Morgan Single Source (Australia), 12 month moving average, average sample size = 19,399. Base: Australians 18+ Household Insurance customers (includes building, contents, valuable items,) Main Income Earners who own or are paying off their home & live alone, with partner or single parents.
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