The South Australian Council of Social Service (SACOSS) has called for government support to improve insurance affordability, warning low-income groups face “catastrophic” financial risks as climate change-fuelled natural disasters increase.

SACOSS has flagged three “viable” funding models to improve insurance accessibility for home, contents and vehicle in the state after a six-month project it undertook last year.

The three models are: a concessions scheme for home, contents, and vehicle insurance; contents insurance for social housing tenants; and not-for-profit mutual microinsurance.

In relation to contents insurance for social housing tenants, the report says it can be implemented by requiring social housing providers to purchase contents insurance on behalf of all their tenants and if this is not possible, then they should provide an insurance-with-rent scheme modelled on similar products available in the UK.

“This report has identified three non-mutually exclusive proposals that governments could

use to address affordability of insurance, with the aim of improving access to home, contents and vehicle insurance for people on low incomes,” SACOSS said.

“If these proposals are enacted, then more people would be financially protected during natural disasters, leading to better post-disaster outcomes for the individuals, communities, and the state.”

According to the report, insurance premiums have been rising – and in Adelaide have doubled since 2000 – and will continue to go up with increased natural disasters.

SACOSS says it is concerned that as natural disasters increase due to climate change, people whose home, contents, and/or vehicles are uninsured may face catastrophic financial losses that push them into poverty, or further entrench their poverty.

The report says data on insurance take up is patchy but about one in two or three people who are living on a low income do not have contents insurance and one in four people who have a vehicle do not have comprehensive motor insurance.

“SACOSS is calling on the government to step up and tackle insurance unaffordability,” CEO Ross Womersley said.

“If access to insurance for people on low incomes is not addressed, we face potentially catastrophic social and financial outcomes in future natural disaster seasons, which may result in a greater number of people experiencing poverty.”

Click here for more of the report.