‘Fledgling Financial Needs’, Affordability and Attitudes as Drivers of Noninsurance Among Young Australians*

Abstract

Building, home contents and comprehensive car insurance promise protection against loss or damage from fire, flooding, accident and theft. In Australia, young people aged 18–24 are among the groups most likely to forego these insurance products. Yet research on the reasons for this remains limited, as noninsurance among young people is attributed to their dependent or ‘fledgling’ life stage, with minimal income and assets warranting protection. In this article, we argue that noninsurance may have serious consequences for young people, particularly if they have limited savings and cannot count on financial assistance from their families. Drawing upon survey findings, we undertake an in-depth investigation into the role of asset levels, affordability and attitudes in driving young people to forego insurance. Our findings suggest that young people are not especially predisposed to distrust insurers, to consider insurance inessential or to oppose insurance on principle. However, other attitudes—including lesser risk aversion, higher confidence in their capacity to mitigate risks and perceptions of insurance as irrelevant to their circumstances or ‘not for them’—may be more prevalent in this age group, driving them to remain uninsured even when they have assets warranting protection and sufficient income to offset affordability concerns.