Australians are sleep walking in to a financial nightmare, with older owner-occupiers under-insuring their homes by an average of $131,000, according to research by Apia, the leading insurer of Australians aged over 50.
The average cost to completely replace a home is $424,000, calculated by Cordell, the foremost authority on the research of building cost and project information, by examining information from over 100,000 homes across Australia. Yet on average over 50s are only insuring their properties for $293,000 according to Apia’s figures.
Grant Taylor, Executive Manager of Apia, commented: “Should a house need to be rebuilt or have major repairs, this massive gap presents a very real risk that the quality and size of the rebuilt house will be substantially less than the original, unless the owner can stump up the additional cash.”
Mike Bartlett, National Manager of Insurance Cost Information from Cordell, added: “Underinsurance in Australia is a real problem and whilst the situation has been improving over recent years as consumers become more informed, because building costs are rising faster than the CPI we need to keep focused on improving the situation.”
In the lead-up to summer, the traditional storm and fire season, Apia is recommending that all Australians review their home insurance policy to ensure they have adequate cover. On average, with Apia, the cost to increase the amount a home is insured by $50,000 will only cost an additional $5.57 a month.
“Australians are renowned for their laid back, ‘she’ll be right’ attitude, but as the terrible weather events of earlier this year showed, that is not always the case,” Taylor added. “While we at Apia have done everything we can to get our customers back in to their homes following the floods and storms, we have seen far too many cases where under-insurance has meant a dramatic change in the quality or size of the homes we are rebuilding for our customers.”
“There are a myriad of reasons why Australians are under-insured by such a huge amount, including serious pressures on the household budget, and a failure to review the value of one’s home regularly. While Apia has tools available on the internet, and our contact centre-staff are qualified able to help our customers establish the most appropriate level of insurance cover, many simply renew their policy for the same value year after year, without taking increasing re-build costs in to account.”
Taylor continued, “It is older Australians that can least afford a huge financial set-back, such as having to pay out large lump sums to rebuild their property, or replace their contents. More often than not they have left the workforce and are living on their superannuation or other investments that are meant to last them for the remainder of their retirement. The last thing anyone wants is for a freak accident or event like a flood or fire to severely impact their quality of life and the remainder of their retirement, when it is relatively cheap to avoid the situation all together.”
|
National (includes NT and ACT which are not shown) |
NSW | VIC | QLD | SA | WA | TAS | |
| Average cost of home | $424,000 | $445,000 | $418,000 | $421,000 | $395,000 | $425,000 | $395,000 |
| Average building sum insured (over 50's) | $293,000 | $321,000 | $287,000 | $286,000 | $275,000 | $288,000 | $377,000 |
| Gap between amount insured and value of the building | $131,000 | $124,000 | $131,000 | $135,000 | $120,000 | $137,000 | $18,000 |
For further information and to arrange interviews, please contact:
David Skapinker,
Senior Communications Advisor, Apia
M: 0467 801 922
T: 02 8121 1404
E: david.skapinker@suncorp.com.au
Apia is a specialist insurance provider for people aged over 50. Providing a wide range of home and contents, car, caravan, motor home, boat and life insurance solutions tailored to the over 50s life stage, Apia has a network of 28 branches across Australia serving almost 700,000 policy holders. For more information on Apia visit www.apia.com.au
Australian Pensioners Insurance Pty Limited ABN 14 099 650 996 (Apia) acts as agent and authorised representative of Australian Alliance Insurance Company Limited ABN 11 006 471 709, the issuer of the general insurance products.
Reed Business Information Pty Limited ABN 80 132 719 861 trading as Cordell Information is Australia’s foremost authority on the research of building cost and project information. Cordell has a large range of standard and custom tailored products and are involved in specialist consulting work, working with clients to provide solutions in a range of varied situations.
