Cover goes by wayside
HOUSEHOLDS hit by the rising cost of living are more likely to ditch their comprehensive car insurance than any other form of family protection, research suggests.
A study by comparison website Finder.com.au found that 23 per cent of drivers had cancelled comprehensive policies because they couldn’t afford it.
Finder’s national survey of more than 2000 people also found that 17 per cent of people had scrapped private hospital cover, 16 per cent ditched extras cover, and 12 per cent cancelled life insurance because of financial pressures.
Australian Bureau of Statistics data shows that the cost of insurance has surged 66 per cent in the past decade, twoand-a-half times faster than the overall inflation rise of 26 per cent in that period.
Finder spokeswoman Bessie Hassan said the research showed that some people were thinking twice about car insurance as a necessity.
“Unlike with other insurance products, there’s no real penalty for ditching a comprehensive car insurance policy,” she said.
“Whereas with health insurance, for example, you may have to re-serve waiting periods.”
Comprehensive insurance covers accidental damage to your vehicle, theft and damage that your car does to other people’s vehicles or other property.
The research found that Generation X was the most likely age group to be cancelling comprehensive car cover.
“Generation X is likely to be dealing with higher living expenses such as mortgages and school fees,” Ms Hassan said.
Insurance Council of Australia spokesman Campbell Fuller said industry statistics showed there had been no decline in the number of overall policies being sold for home, contents and motor vehicle insurance, and no decline in levels of overall cover.
Mr Fuller said some people might consider cutting back on insurance but did not follow through.
“Consumers are looking for ways to better manage their premiums by accepting slightly higher excesses to reduce their premiums, or examining ways of combining policies with one insurer to receive a discount,” he said.
“Many are choosing to pay a full year’s premium upfront, for which many insurers will offer a discount.”
Mr Fuller said insurers had hardship provisions to help customers in financial difficulty. “Being uninsured is a poor outcome for anyone.”