The looming fire season poses an extra risk for lower income Victorians who are unable to afford adequate insurance to cover them in the face of catastrophic property loss, says the Victorian Council of Social Service.
“The Victorian bushfire season has already begun, with homes destroyed in Lancefield in October, extreme fire conditions declared across Victoria this week, and warnings for a dangerous season ahead,” said Emma King, CEO of VCOSS.
“Insurance is an essential product for ensuring that everybody, including people on low incomes, are able to recover from shocks and are resilient in the event of losses.”
“However, we know that access and uptake of insurance is low among people on low incomes, and a significant contributing factor in financial exclusion.”
“People on low incomes, including the working poor, beneficiaries, refugees, renters, young adults and pensioners, have the fewest resources to dedicate to recovery after a loss, but are least able to afford the protection and security provided by insurance in the first place.”
“Evidence shows that people experiencing disadvantage are most at risk during and after emergencies like bushfires and floods. This includes their lack of financial capacity to plan for and respond to the financial cost of a disaster.”
“A 2013 report published by Good Shepherd Microfinance, Covering the essentials, stated that with one in six Australian adults living below the poverty line, 17.7 per cent of the population are fully or partially excluded from financial services.”
“The Brotherhood of St Laurence, in its Submission to the Natural Disaster Insurance Review, stated that while people on low incomes are aware of the benefits of purchasing insurance they are unable to access appropriate insurance products owing to a range of barriers, most significantly affordability.”
”The Victorian government can help low income and vulnerable Victorians who are most impacted in emergencies by exploring options to improve house and contents insurance affordability. This could be through introducing concessions for insurance policies, stamp duty waivers and supporting innovative insurance products that can be made widely available for social and community housing tenants and low income Victorians.”