ONE in five Australians don’t have insurance cover for their cars or home and contents, often because they can’t afford the premium.
With that in mind, not-for-profit Good Shepherd Microfinance and Suncorp have teamed up to create the country’s first insurance product for people on low incomes.
Good Shepherd chief executive Adam Mooney said low-income earners who could not afford insurance sometimes found it impossible to use everyday essentials like the family car with peace of mind.
“Our experience with financial programs for people on low incomes shows just how easy it is to slip into hardship after a financial shock such as the loss of a family asset, which can be expensive to replace,” he said.
“Insurance is important in enabling our clients to build assets and some wealth, however small, to act as a buffer against financial hardship and to build resilience.”
The Essentials by AAI product was developed with external advisors as an affordable and simple micro-insurance policy, minimising excess and allowing low premiums with flexible payment options.
Mix-and-match cover is available for contents and cars from $4 per week. Suncorp personal insurance chief executive Mark Milliner said people who lacked insurance often needed it the most.
“Working with Good Shepherd Microfinance has helped us to better understand the needs of those who are doing it tough,” he said. “We’ve found that traditional insurance is often too expensive for them, and in many cases the level of cover is simply too high.
“Our research shows this market just wants cover for essentials like their second-hand car and whitegoods. “We have worked with financial counsellors, legal aid, the Financial Ombudsman Service, researchers and consumer representatives who have helped us to design a product to do just that.”
Mr Milliner said the product would help low-income earners accumulate and use assets with a financial safety net in place. “It’s a great example of working with others... to create something that addresses the issues of financial exclusion in this country,” he said.
The insurance can be paid by fortnightly direct debit or via Centrepay, aligning people’s income with their premium payment.
Features include cover for $10,000-$20,000 in contents and up to two cars valued at $3000-$5000, and policy holders will have access to two standard excess-free claims.
Details 1800-429-598, www.essentialsbyaai.com.au
