Unless they're worried about dying
Insurance is hard to get if you are on a low income, unless you’re planning your funeral.
A report from the Brotherhood of St Laurence too be launched by assistant Treasurer Bill Shorten today finds most types of insurance particularly ill-suited to low income Australians, requiring big infrequent payments instead of small regular ones, imposing large excess payments, written in impenetrable language, and limited to minimum amounts that are beyond the maximum value of the possessions low income people have.
Except for funeral insurance. The payments are small and regular and it seems to be more popular the less income someone has.
Many of the 200 low income earners surveyed by the Brotherhood had funeral insurance but not home contents or car insurance, reasoning “they could eventually recover from a loss, and would prefer to ensure they were providing some security for family after their death”.
The biggest beef seems to be that with the exception of funeral insurance it is very hard to make small regular payments...
“Because the payments are big they have to compete with expenses on tangible goods such as food, or even a new TV,” said the report’s author Dominic Collins.
“All insurers should be required to accept payment through Centrelink’s Centrepay direct-debit facility which is already commonly used by essential services such as utilities.”
“And it should be collected with rent, for just a few dollars extra per fortnight, bulk purchased by housing providers.”
The study found 32 per cent of low income Australians did not insure their homes, rising to 79 per cent of very low income Australians. An “alarming” 26 per cent of very low income Australians reported owning a car but holding no vehicle insurance. Without third party property insurance they were at “severe risk” in the even of an accident.
Asked why funeral insurance appeared to be popular for people who couldn’t insure their car, Mr Collins put it down to advertising.
“Watch daytime television. It plays on the fear of being buried in a paupers grave and its advertised as being affordable. By contrast home contents ads are more of cabaret act - they are less effective.”
Published in today's Age
Reducing the Risks Insurance 2011
. Don't borrow, don't save, don't spend. Advice for the stretched
. Ignore the private health insurance guilt merchants