Little progress made on under-insurance, survey shows
New Zealand is not making any progress in tackling its under-insurance problem, new data suggests.
Monday, October 15th 2018, 6:00AM
Trade Me surveyed 1000 New Zealanders to gauge their attitudes to insurance.
Head of Insurance Jaime Monaghan said it was intended to check whether any progress had been made on a $650 billion underinsurance problem identified in 2013 by the Financial Services Council and confirmed by a Trade Me study the year after.
But it showed little improvement four years on: While 88% had vehicle insurance and 74% had home insurance, only 51% had life insurance and just 41% health insurance.
"Very little has changed in the last four years," she said.
"Back then just 51% of Kiwis said they had life insurance, 45% had health insurance and 88% had vehicle insurance too.”
Monaghan said New Zealanders told them life insurance was not important.
“Twenty per cent of our survey respondents said life insurance isn’t important to them and that compares to just 4% for vehicle insurance and 5%for home and contents.
“While it’s definitely important to have insurance for your large assets, we’d argue the greatest asset you have is you and your ability to earn money for you and your family.
“These aren’t conversations or things we want to think about but at the moment we’re concerned that too many New Zealanders simply don’t want to think about the what ifs but if something unexpected happened to your partner or loved one for example, would you have enough money to get by."
She said people understood the message that they should protect their belongings but did not want to face up to the worst-case scenarios that might necessitate life insurance.
Couples with children had higher rates of life insurance at 66.5% but that was below vehicle insurance at 91% for that group and home and contents at 84%.
To change the situation, people had to be forced to consider how they might cope in a disaster scenario, she said.
“We need to get people to have these conversions, what would I do, how would the kids and I cope if you weren’t here.”
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