Taxes on insurance products have been slammed as "simply a joke" by one of Australia's leading economists.

Access Economics founder Geoff Carmody says the range of taxes on insurance products is a huge disincentive for people wanting to take out cover.

He told an Insurance Council of Australia (ICA) conference in Melbourne last week that the tax burden on premiums is "stupid, inefficient and archaic", and called for the three taxes on insurance - GST, the fire services levy and stamp duty - to be scrapped.

Insurers say high taxes are the major cause for non-insurance in Australia. ICA estimates as many as 1.8 million homes have no home and contents cover, while up to 80% of people are under-insured by at least 10%.

In the five years to 2005-06, state government taxes on insurance increased from $2.4 billion to $3.56 billion.

Mr Carmody says there is no mandate for governments to provide incentives for insurance take-up. "But there is a very strong case for removing some disincentives.

"No Australian state or territory government taxes general insurance properly. Australia's general insurance taxation is the highest in the world."

Mr Carmody is one of Australia's leading economic minds, working in key policy areas in Federal Treasury such as wages and foreign investment. He has also represented Australia at the International Monetary Fund and the Organisation for Economic Co-operation and Development.