Ah, property ownership, the dream, the investment, the ever-growing list of things to worry about. Rates, repairs, tenants who somehow think “no pets” doesn’t apply to their emotional support goat… and now, insurance.
Or rather, the alarming lack of it.
It turns out that a growing number of Australian property owners are rolling the dice and skipping insurance altogether. According to Compare the Market, 26.5% of Aussies now have no property insurance, up from 23% just two years ago. And here’s the kicker: those who do have insurance are, on average, underinsured by 18%.
If that stat doesn’t make you a little queasy, let’s put it another way: If disaster strikes, you could be left footing a bill that’s tens (or even hundreds) of thousands of dollars short.
Let’s talk about why that’s happening, why it’s a terrible idea, and what you can do about it.
Underinsured? You Might Be Without Realising It
Most property owners don’t think about insurance unless they absolutely have to. And when they do, they often assume that whatever they set up five years ago is still enough to cover them today.
Spoiler alert: It’s probably not.
Thanks to skyrocketing construction costs, the price of rebuilding a home has surged by 40.8% since 2020 (cheers, supply chain issues). That means if your insurance policy hasn’t been updated recently, the payout you get in a worst-case scenario may fall well short of what you actually need.
Imagine your house gets wiped out in a storm (grim thought, but stay with me). You check your insurance policy, breathe a sigh of relief because you’re “covered”, only to realise the payout doesn’t even come close to today’s rebuild cost. Now you’re staring at a shortfall of hundreds of thousands of dollars.
And if you think this only happens in extreme cases, think again. MCG Quantity Surveyors, who specialise in insurance replacement valuations, see it every day, homeowners left stunned when they realise just how much they’ve underinsured their biggest asset.
Why Are So Many People Uninsured?
So, why are so many Aussies either uninsured or underinsured? A few reasons:
- Rising Costs Everywhere – Between mortgage repayments, groceries, and the price of coffee edging towards a small fortune, insurance is one of the first things people cut.
- “It Won’t Happen to Me” Syndrome – Until it does. And then it really, really sucks.
- Insurance Premiums on the Rise – With natural disasters becoming more frequent and severe, insurance companies are hiking premiums faster than you can say “climate change.” Before long, they’ll be asking if your house has ever thought about flooding.
- Misplaced Confidence – Many property owners assume their coverage is adequate but never actually check the numbers, or read their policy!
And then there’s Generation Z, who’ve been forced into Olympic-level financial risk-taking thanks to record-breaking property prices and a cost-of-living crisis that won’t quit. With the median home price now hitting $985,900, it’s no surprise that 41.5% of Gen Z property owners have no insurance at all. Maybe they’re banking on being young and lucky, but unfortunately Mother Nature doesn’t check birth certificates before dishing out hailstorms…
How to Avoid a Financial Nightmare
Here’s the good news: Avoiding underinsurance is actually really simple.
✅ Review Your Policy Today – No, really. Pull it out, read it, check the numbers, and ask yourself: Would this actually cover the cost of rebuilding my property in 2025?
✅ Get an Insurance Replacement Valuation – This isn’t just a guess-your-own-value situation. Experts (like MCG Quantity Surveyors) can give you an accurate estimate based on current construction costs.
✅ Use Smart Tools to Stay on Top of It – At TaxTank, we’re always on the hunt for smart, cost-effective solutions to help property owners stay in control. That’s why we’ve partnered with MCG Quantity Surveyors to make sure your insurance actually covers what it should, without the guesswork.
For a limited time, TaxTank users can secure an insurance replacement valuation for residential properties at a fixed price of $550 (saving $110). Just mention “TaxTank” when you book.
Oh, and did we mention it’s tax-deductible for investors? 😉
Final Thought: If You Couldn’t Rebuild It, You’re Not Insured Properly
It’s a brutal truth, but one worth sitting with: If you don’t have enough coverage to rebuild your home, you’re not actually insured. And with construction costs on the rise and weather events becoming more unpredictable, now is not the time to take chances.
So, whether you’re a seasoned investor, a first-home buyer, or a property owner just trying to keep your financial house in order, make sure your insurance is working for you, not against you. Because let’s be honest, if disaster strikes, the last thing you want is a financial crisis on top of a real one. A quick insurance check today could save you the stress, the scramble, and a six-figure headache.
