Three in five households have gone without or delayed buying essential coverage due to affordability concerns, according to Choosi’s Insurance Gap report.

The comparator’s survey of more than 2200 Australians found 32% cite high premiums as their primary reason for forgoing cover, while 25% prioritise other financial payments.  

About 56% of respondents have chosen minimal or low-cost insurance to save money, and 38% say they have bought an affordable policy despite it offering less coverage than they need.  

About 31% have experienced financial difficulties due to unexpected events not being covered by their insurance.  

A further 20% have gone into debt at least once due to not having appropriate coverage. The average debt incurred is about $28,286.  

Choosi says knowledge gaps are another key driver of underinsurance. About 40% of those surveyed have encountered unexpected exclusions or limitations when making claims.    

About 39% admit buying cover without a complete understanding of it, instead relying on assumptions and trusting their provider without reading the details.  

Choosi budgeting expert Breana Davidson says taking time to research a policy “can make all the difference”.

“So many of us sign up for insurance thinking we’re covered for everything, only to discover the fine print tells a different story,” she said.

Affordability remains a key factor when buying, with 68% of respondents indicating it is a high priority. About 58% cite the level of coverage and 36% the insurer’s reputation.  

About 47% of customers learnt about insurance through online research, compared with 27% who opted for one-on-one support.  

See the report here.