This report is the first of a two-part research project to better understand how low-income households perceive and value insurance policies. The authors report on a quantitative analysis of a database of 20,000 NILS (No Interest Loans) clients in 2019.

This analysis reports on 5 kinds of insurance: car, house/contents, private health, funeral policy and life/unemployment. The analysis indicates how prevalent each type of insurance is across the client cohort, and whether there are differences in coverage based on quintile (income level), gender, age, Aboriginal or Torres Strait Islander identity, family status, homeowner status, car registration and state. Over all findings were that this cohort appears to be un-insured, with 58 per cent without any insurance. Women, older people and those with more income were generally more likely to be insured, but there were variations across the policy types.  By insurance type, car insurance was the most popular insurance, and was directly correlated to income, with higher income households more likely to have a policy than lower-income households. House/contents insurance was much more likely to be held by people who either owned or were purchasing their home, with 39 per cent holding a policy, while renters were insured at only 6 per cent. Funeral policies seemed to be over-represented in this group, with an almost inverse relationship between income and the likelihood of holding a policy. Health insurance and life/unemployment insurance each had very low representation.

This report provides insight into insurance patterns for low-income households, but cannot answer questions of the value that is placed on various types of insurance. Part two of this project will provide qualitative analysis of interviews to better understand the decision-making process for people on limited income.