The Australia Institute warns that more than 1.4 million households face serious economic risk after new data reveals nearly one in five homes are underinsured or uninsured.  

The researcher surveyed more than 2000 homeowners and 78% of respondents reported having their home fully insured, with 15% saying their home was underinsured and 4% having no insurance.  

The institute says households in the middle or below-average wealth brackets face an “extraordinary risk” of losing nearly 75% of their overall wealth if their uninsured home is damaged beyond repair.  

Regarding contents insurance, 68% said they are fully insured, with 19% underinsured and 10% uninsured.  

The Australia Institute senior economist Matt Grudnoff says families are “facing an almost impossible choice when it comes to home and contents insurance”.  

“They either find the money to pay ridiculous premiums or risk losing everything they own,” he said.  

Independent MP Zali Steggall says the findings show that insurance costs are a “social and economic disaster in the making”.  

“The soaring cost of insurance and rising levels of underinsurance is a direct consequence of worsening climate change,” she said.  

“We have a clear choice: act now to build resilience, lower insurance costs and protect lives and livelihoods, or leave Australians and our economy vulnerable to financial ruin.”  

She calls on the major parties to commit to legislating her National Framework for Adaptation bill in the next parliament.  

“The next government must put climate resilience at the heart of its economic plans,” Ms Steggall said.  

“This means prioritising smarter planning, creating more resilient homes, and scaling up investment in climate risk reduction measures that protect households, communities, businesses and our economy.”