A recent Youi survey has raised concerns about the depth of understanding many Australian drivers have when it comes to their car insurance policies.
While most respondents said they were confident in what their insurance covers, few had reviewed the actual policy documents in detail.
The study, conducted by insurer Youi, surveyed over 2,000 Australians and found that 83% of participants reported feeling confident about their policy knowledge.
However, only 25% had fully read their Product Disclosure Statement (PDS) – the document outlining key policy terms, coverage limits and exclusions. Another 33% had read parts of the PDS, and 30% admitted to merely skimming it.
Differences in confidence were observed across demographics. Men were more likely than women to say they understood their policies (88% compared to 78%), and older Australians – especially Baby Boomers and Pre-Boomers – expressed greater confidence than younger generations. Gen Z participants were the most likely to have read the PDS in full, yet they reported lower confidence in their comprehension of the material.
Chris Jarrett, executive general manager of claims at Youi, said the findings point to the need for better policy education among consumers – emphasising the responsibility of insurance brokers.
“It’s clear from the research that more should be done in educating Aussies about insurance and how to best protect ourselves. Australians are putting their hard-earned dollars towards car insurance as a safety net. Knowing what your policy covers you for is key to feeling confident if you need to make a claim,” he said.
The survey also found that while a majority of drivers felt they knew what to do immediately following a car accident, fewer than half were confident in handling the claims process. Of those who had made a claim in the past, nearly half turned to outside help from family, friends, or online sources.
To address these gaps, Youi has developed a “Car Accident Checklist” that insurance brokers could share with their clients to help them understand what information to collect at the scene and how to initiate a claim:
“Experiencing a car accident is stressful. And the last thing Aussies need is to have additional stress placed on them from uncertainty in their car insurance policy. An insurance PDS is often seen as being too detailed, complex, and filled with legal jargon,” Jarrett said.
Similar misunderstandings are being seen in travel insurance, particularly among Australians hiring scooters or motorcycles overseas.
A separate survey by Zoom Travel Insurance found that 40% of travellers were unaware that a proper motorcycle or scooter licence is often required for insurance to apply.
Zoom’s marketing manager, Natasha Sullivan, said confusion about coverage could have serious consequences.
“Too many tourists assume they can hire a scooter without the correct license. Tourists planning to hire a scooter or motorbike must ensure they are properly licensed in order to be covered by travel insurance. Should they fail to do so, they’d likely not be covered by travel insurance in the event of an accident,” she said.
According to Zoom’s guidelines, riders need a motorcycle licence to operate bikes above 125cc. For smaller scooters, an Australian driver’s licence may be sufficient, provided it is recognised by the country’s licensing laws. In some cases, an international driving permit may also be necessary.
Sullivan also highlighted that travel insurance conditions apply to passengers as well. For coverage to be valid, both rider and passenger must wear helmets, and the rider must be properly licensed.
