Households struggling under the weight of the rising cost of living are more likely to ditch their comprehensive car insurance than any other form of family protection, new research suggests.
A study by comparison website Finder.com.au found that 23% of drivers had cancelled comprehensive policies because they couldn’t afford it.
Finder’s national survey of more than 2,000 people also found that 17% of people had scrapped private hospital cover, 16% dropped extras cover, and 12% cancelled life insurance because of financial pressures.
Australian Bureau of Statistics data shows that the cost of insurance has surged 66% in the past decade, two-and-a-half times faster than the overall inflation rise of 26% in that period.
Finder spokeswoman Bessie Hassan said the research showed that some people were thinking twice about car insurance as a necessity.
“Unlike with other insurance products, there’s no real penalty for ditching a comprehensive car insurance policy,” she said.
The research found that Generation X was the most likely age group to be cancelling comprehensive car cover.
“Generation X is likely to be dealing with higher living expenses such as mortgages and school fees,” Ms Hassan said.
Insurance Council of Australia spokesman Campbell Fuller said industry statistics showed there had been no decline in the number of overall policies being sold for home, contents and motor vehicle insurance, and no decline in levels of overall cover.