Good Shepherd Microfinance calls for insurance access and affordability to be improved for people on low-incomes

We feel that insurance should not be a luxury item and that it must be better targeted to suit the needs of people on low incomes.

Over 20 per cent of the population does not have contents insurance, highlighting a clear need for suitable products to be developed. 

Our recently published insurance report, Covering the essentials, calls for product innovation to increase access and affordability of home contents and vehicle cover. This is the latest report from Good Shepherd Microfinance and the next step in our journey to improving financial inclusion for all people in Australia. The report outlines a clear pathway to the creation of inclusive insurance products and we welcome partnerships with insurers and others to increase access to cover.

Recommendations include:   

Payments to be allowed fortnightly and through Centrepay, so consumers can synchronise premiums with their income, which is essential for increasing access and uptake of motor vehicle and home content insurance.

Products should also be simple and disclosure statements should go beyond basic requirements, to be clear, concise and effective.

The report draws heavily from responses received to the insurance discussion paper released in March. Feedback received from the community sector, insurance industry, government agencies, legal centres and individuals informs our recommendations. There is consensus among stakeholders that non-insurance is an issue that needs addressing, that which well identified barriers will be able overcome.

According to the report’s author, Dominic Collins, insurance is essential in improving economic wellbeing. “Through research we know people want insurance, but without access to appropriate and affordable insurance it is impossible to give a meaningful consideration to asset protection”.

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“While Good Shepherd Microfinance enables people to obtain household goods through our financial programs, we know many of these goods go uninsured. This leaves our clients exposed to loss they may not be able to absorb or recover from. We are committed to finding innovative ways for our clients to have financial peace of mind and that means their important assets are protected”, said CEO Adam Mooney.

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. 

Since December 2012, Good Shepherd Microfinance has been investigating how we may be able to increase access and affordability of insurance for people living on low incomes, with a view to being able to offer insurance products through our network of community partners. This work has been supported by National Australia Bank (NAB), and is another great achievement in our 10-year partnership.

We welcome further dialogue on this important issue and invite other community, government, and industry organisations to join us in developing insurance products that will allow Australia’s most vulnerable to protect their belongings.

Good Shepherd Microfinance will continue work towards increasing access to suitable financial products. 

For more information, please contact Dominic Collins on (03) 9495 9634 or at dcollins@gsmicrofinance.org.au.    

 

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