In a revealing new survey, it turns out that millions of Australians are avoiding making insurance claims, worried that doing so could lead to sky-high premiums. With the rising cost of living weighing heavily on many households, insurance has become another financial hurdle—one that Australians are finding increasingly hard to navigate.
The Rising Cost of Insurance: A Financial Tightrope
According to research from comparison site Finder, around 4.5 million Australians are now choosing to forgo insurance claims for fear of what it will do to their premiums. The survey showed that 21% of respondents had avoided making a claim altogether, which includes not just home or car insurance, but even pet and health insurance.
Nearly 10% of people surveyed said they’d skipped filing a home insurance claim, while another 9% admitted to avoiding a car insurance claim. Even more concerning, about 4% chose not to make claims on their pet insurance, and 7% avoided filing health insurance claims. While health insurance claims don’t affect premiums, the trend still reflects a growing reluctance to engage with insurance policies at all.
Finder’s Taylor Blackburn explained that insurance, which is meant to provide peace of mind, is instead becoming a source of anxiety for many Australians. The basic idea behind insurance—to protect you financially in times of need—has started to feel like a gamble for a lot of people. “For many Australians, insurance has become a conundrum,” Blackburn said. “If they make a claim, they risk higher premiums. If they don’t, they’re left to deal with the issue on their own.”
The Fear of Premium Hikes
The skyrocketing cost of insurance is a major driver behind this shift in behavior. Between June 2022 and June 2025, insurance premiums have surged by over 35%, far outpacing inflation, which stood at just 12.4% during that same period. These increases have left many families struggling to keep up with the rising costs of their everyday essentials, let alone insurance. Blackburn said that for some, even a small claim could lead to premiums that feel unaffordable in an already tight budget.
“If people are avoiding claims, even for minor incidents, it’s a clear sign of how hard things have become financially for many,” he explained to Sky News. “When you’re living on a financial tightrope, the last thing you want is to make your situation worse by increasing your insurance costs.” This trend of avoiding claims is worrying for several reasons. Firstly, it defeats the purpose of having insurance in the first place. “Insurance is meant to provide security when things go wrong,” Blackburn said, “but if people are afraid to use it, it undermines the whole system.“
Secondly, it signals that many Australians are struggling just to keep their heads above water. The situation paints a picture of a nation that is finding it harder and harder to cope with increasing living costs while trying to maintain their safety nets.
What Can Australians Do?
So, what should Australians do in response? Blackburn recommended setting up an emergency fund to help cover unexpected expenses, rather than relying entirely on insurance. “I personally keep my excess a bit higher to protect myself from bigger issues while using my rainy-day savings for the smaller stuff,” he said.
He also encouraged Australians to review their insurance policies regularly to ensure they still meet their needs and are not unnecessarily expensive. “Take the time to compare prices when your policy renews, and make sure you’re getting the best value for your money,” he added.
For those struggling with higher premiums, Blackburn suggested looking into different providers or exploring sign-up offers, which can sometimes offer significant savings for new customers. But above all, the key takeaway is to have a plan in place, whether that’s through savings or adjusting your policy, so that you’re not caught in a tough spot when life throws you a curveball.
