The Choosi Insurance Gap Report 2025

Key findings

• Three in five Aussies are delaying or outright avoiding essential insurance due to cost concerns, leading to significant debt and financial hardship for many.
• One in five have gone into debt once, or more than once, as a result of not being insured or being underinsured, with debt averaging over $28,000.
• 42% of those who purchased an insurance policy assume it covered what they need, while 33% blindly trust their provider or adviser, rather than actively checking the details.
• Nearly three in five opt for minimal or lower-cost insurance cover to save money, with comprehensive car insurance (40%) being the top category where this occurs.

About the report

When was the last time you discussed insurance with your friends or family over dinner? It's far from a casual conversation for most of us with many finding its challenges overwhelming.

Terms like indemnity, underwriting, and the difference between agreed value and market value are common in insurance. Yet, these concepts were rarely, if ever, taught in high school, leaving many of us scratching our heads when making our first insurance claim. In fact, around two in five (39%) Australians have purchased insurance policies without fully understanding the cover.

The Choosi Insurance Gap Report not only uncovers this widespread insurance knowledge gap but also highlights how we’re increasingly incurring significant financial debt by simply delaying or avoiding essential insurance cover.

As the cost-of-living continues to stretch our wallets thin, it’s surprising that more of us aren’t leveraging insurance to avoid unexpected costs.

Choosi seeks to help Australians make informed financial decisions by simplifying the process of comparing and applying for insurance from the options they have available, helping Aussies choose cover that suits their needs, budget, and lifestyle. In partnership with MYMAVINS, Choosi wanted to explore the financial decisions shaping everyday Australians with The Choosi Insurance Gap Report. In its latest instalment, the study explores the critical insurance knowledge gap of Australians, revealing its influence on our financial decision-making and preparedness.

The cost of underinsurance

With the rising cost-of-living, especially for younger generations, being financially savvy is no longer optional. The Choosi Insurance Gap Report revealed high premiums (32%) and competing financial priorities (25%) are the primary reasons why we forgo insurance. It's no wonder we are feeling the squeeze and making tough choices.

Yet, despite prioritising other financial commitments, foregoing insurance now will ultimately cost us more in the long run, with one in five (20%) of us going into debt as a result of being underinsured, with this debt averaging over $28,000.

If you've ever lain awake wondering how you’d pay for a big “uh-oh” moment, you’re not alone. The vulnerability is widespread, as more than half of us (58%) anticipate a moderate to very serious financial burden from a major out-of-pocket expense that could have been insured. The data shows that medical and health costs (33%), vehicle damage (29%), and loss of income (28%) are the leading causes of financial distress when we’re underinsured.

The familiarity of insurance terms

Let's be real – we can't exactly be blamed for not knowing all the ins and outs of insurance, especially for those of us who are still new to ‘adulting.’ Choosing the right insurance is already hard enough, and for many of us industry jargon only adds to the confusion. Core insurance terms like ‘underwriting’, ‘indemnity’, and ‘agreed value vs market value’ are confusing for most of us, with only one in five (21%) of us finding no insurance terms confusing.

Because of these knowledge gaps, many of us are feeling vulnerable and often relying on blind trust rather than actively checking the details. What’s even more alarming is that the policies that are causing the most confusion are the ones designed to protect the most important assets, including private health insurance (27%), home & contents insurance (22%), and life insurance (22%).

Private health insurance - why do I need it as a young person?

If you asked most young Aussies if they need health insurance, you’ll probably get a shrug – until an unexpected hospital bill lands in their lap. As it turns out, close to one in three (31%) of us are facing financial hardship because we've had to deal with unexpected out-of-pocket expenses due to underinsurance. In fact, medical costs are the top cause of financial hardship for uninsured Australians. Due to financial concerns, nearly 60% are delaying or avoiding essential insurance, with private health insurance being the most neglected (38%).

Homeownership and insurance

The journey to homeownership can be a rewarding yet often overwhelming experience, forcing us to navigate hard conversations, challenging paperwork and completely drain our savings. It’s completely understandable that essentials like home & contents insurance might fall by the wayside amidst all the other pressures.

It’s no wonder that three in five (56%) of us opt for minimal or lower-cost insurance cover to save money, with home & contents insurance being a top category where this occurs. But what are the true long-term savings? Damage to a home or property can strike you at any time. To truly protect your finances, preparedness is key. The financial burden of uninsured home damage can be immense, frequently pushing us into significant financial difficulty when these events occur without adequate cover.

Adding to this vulnerability, home & contents insurance (22%) is perceived as one of the most confusing types of insurance to research, alongside private health insurance and life insurance.

Insurance for a protected life

So, while it’s tempting to shove insurance to the bottom of your to-do list, The Choosi Insurance Gap Report serves as a reminder to recognise the true cost of being uninsured, whether for your health, home, income or car.

It's no secret that insurance can be confusing. To help simplify it, well-known budgeting and lifestyle content creator, Breana Davidson, known for her honest and relatable budgeting advice for younger Aussies, has shared her top tips on how to leverage insurance as your superpower and increase your insurance know-how.

Suggestions from Breana

• Always read your policy wording and highlight anything you’re unsure about
• Ask your insurer to explain confusing terms in plain language that you’ll understand
• Compare policies side-by-side, not just by price, but by what’s included
• Review your cover yearly to make sure it still suits your needs and budget