Some of Nick’s more recent research at JCU investigates the levels of home insurance taken up by the residents of Cairns. In January of this year, he and the other members of his research team submitted a report to the Cairns Regional Council.
Their report shed light on some important patterns among different groups of Cairns’ residents and how they considered home and contents insurance, including the cost of premiums and their level of cover. “We produced a 100-page report that effectively looks at under-insurance rates in Cairns. We did some broad-based survey analysis but also some qualitative research interviews with householders,” Nick says.
Despite North Queensland’s wild wet seasons and frequent risk of cyclones, bushfires and landslides, Nick’s research found that some people were under-insured.
“One of the major findings was that homeowners were taking insurance only on the basis of obligation rather than choice,” Nick says. “Often people would try to reduce their premiums by reducing how much their home and contents insurance covers.”
“But the bigger pattern we noted was that renters were increasingly not having any contents insurance. That was interesting because it was often for a variety of reasons, including cost — it can be quite expensive — but also some reluctance to trust insurance companies. Often renters will also have some confidence that they don’t need insurance in combination with the belief that they don’t have much ‘contents’ to insure.
“That pattern among renters was really interesting to us because what we’ve seen during past natural disasters is that most often renters are the ones at a loss. Sometimes tenants lose the property they’re living in when the house is declared unliveable and then they also don’t have insurance to help them find somewhere else to live or to replace their belongings,” Nick says.
Although Nick says that Northern Australia has some of the highest insurance premiums in the country, often because of the level of cover that insurance companies have to provide, cost is still a barrier for many individuals, including single women or young people who may be earning less. The recent federal government announcement of a reinsurance pool worth $10 billion dollars may change this for the better.