A growing number of people are not able to afford home insurance. The financial regulator is warning without it, Australians are in breach of mortgages or land lease contracts. It is also posing a growing threat to the stability of the banking sector.
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00:00A few weeks ago Blair Jeffreys and his fiancé Ella Green got an unwelcome surprise when
00:08they received their home insurance renewal.
00:11Last year our premium was about $2,069 and then this year when we got the annual premium
00:17it had gone up to about $3,600.
00:21Their experience isn't unusual.
00:241.6 million households in Australia face insurance costs that are more than one month's
00:30worth of gross annual household income, so that's very expensive.
00:36Those 1.6 million households are classed as facing extreme affordability pressure, with
00:41many of those paying premiums that are more than nine weeks of their pre-tax income, if
00:46they can afford to pay it all.
00:48I am absolutely seeing more examples coming through the phone lines of people who simply
00:53cannot afford their insurance anymore.
00:55The Actuary Institute's report estimates 180,000 households with mortgages face extreme insurance
01:02costs, with many unlikely to be paying their premiums.
01:07Several homeowners around Australia have told the ABC they're currently in a home that's
01:11under-insured or uninsured altogether, which is putting them in breach of the conditions
01:16of their mortgage.
01:17One woman in Queensland who didn't want to do an on-camera interview out of fear of losing
01:22her home, said her insurance premium went from $3,000 last year to more than $30,000
01:27this year, which she can't afford to pay.
01:30The insurance industry says the price rises are beyond its control.
01:34Things like the rising value in Australian homes, the impact of inflation, particularly
01:40on building materials and labour.
01:42But that's little comfort for Blair and Ella, who'll have to pay their insurance bill out
01:46of their wedding fund.