Are you under insured?

A recent NRMA survey found that while most people thought they had adequate insurance, only about 20% of people actually had enough to cover all of their possessions. Two in five renters had no contents insurance at all, and one in four people did not have their cars adequately insured.

Only about 20% of Australians have life insurance, and even when they do, they are often insured for much less than is really needed. On average, full-time workers in their mid-thirties with young children need insurance cover to provide for at least 10 times their taxable earnings. Recent research for IFSA found that only 4% of this group have this level of cover. The research estimated that about 60% of those with dependent children do not have enough cover to look after their loved ones for more than a year if they were to die. Only about one in fifteen Australians have income protection insurance, and again, are generally insured for much less than required.

One of the reasons for this chronic under-insurance appears to be consumers lack of confidence in insurance and financial advice, and lack of understanding of insurance products. We don