Aussie Homeowners Struggling To Afford Insurance

Home insurance is becoming unaffordable for a growing number of Australian households as increased climate threats drive up premiums, potentially putting billions of dollars in mortgage loans at risk, Stella Qiu reported for Reuters.

As of March 2024, 15% of Australian households were experiencing home insurance affordability stress.

As of March 2024, 15% of Australian households were experiencing home insurance affordability stress, defined as having premiums that cost more than four weeks of their income, according to a report from the Actuaries Institute.

This equates to 1.61 million households, compared to 1.24 million facing affordability stress a year ago—a 30% increase.

Rising insurance costs have fueled inflation in Australia, and there are signs that some homeowners can no longer afford to protect their homes due to climate-related risks and high construction costs.

"Unfortunately, we expect this trend to continue because of the overall increasing risk of natural disasters associated with climate change, which will continue to put upward pressure on premiums," said the report's lead author, Sharanjit Paddam.