Most people recognise the importance of having insurance, yet a significant portion of Australians don’t have adequate insurance to ensure that themselves, their assets and their businesses are fully protected. Being underinsured undermines the effect of an insurance policy and can leave you exposed to undue risk, and Australia is lagging behind when it comes to insurance such as property protection.
So whether you have insurance for your business or personal cover, could you be among the underinsured?
One in eight Australian SMEs do not have enough insurance.
Insufficient insurance is a national problem
A recent report from The Swiss Re Group has revealed that Australia is exposed to an annual insurance gap of close to $4.5 billion for property alone. Small businesses are among the worst affected, with the research finding that one in eight SMEs do not have sufficient cover. According to Rate Detective Co-Founder David Kaplan, this insurance gap could have serious consequences for business owners and the average Australian alike.
“If you’re struck ill and all of a sudden can’t work for three months, how are the household bills, mortgage, school fees, etc. going to be paid? Serious illness or injury, let alone the death of a family member, can have a devastating impact on families, both emotionally and financially,” he said.
“It’s a concern that so many Australians have not accounted for this issue and we understand that in many cases this is because they don’t understand how personal insurances work.”
Rob Whelan, chief executive of Insurance Council of Australia’s initiative Understand Insurance, says that Australians need to wise up to the importance of having the correct cover.
“Insurance is not a commodity. It’s a promise. It allows people to take control of their lives against life’s many uncertainties,” he said.
How to ensure you’re not underinsured
While you certainly don’t want to waste money on cover you don’t need, not having enough insurance could be even more costly. You can help make sure you aren’t caught unprotected by:
Finding the right broker, who can provide you with access and information on the most suitable policies.
Checking that your property and liabilities are valued accurately so you have the right level of cover when you need it.
Updating your policy when your circumstances change.
Ultimately, partnering with a broker is your best bet for avoiding the underinsurance trap, as they are experienced in assessing risks and identifying exactly the right cover for their clients. To find out more about how we can help, get in touch with MGA Insurance Brokers.