Household insurance and financial stress: Securing the family home in a changing climate
Melbourne Institute Research Insight No. 06/23
Date: October 2023
Author(s):
Abstract
Underinsurance poses an urgent threat to Australian households. As climate change gives rise to more frequent and more damaging weather-related events, households face growing risks to their most important asset—their home. We use Household, Income and Labour Dynamics in Australia (HILDA) Survey data to track insurance coverage over time in order to explore the relationship between financial stress and underinsurance. We ask, do households cut their insurance coverage as a way to shore up their finances in the wake of a shock like unexpected job loss, illness or family breakdown?