Underinsurance as adaptation: Household agency in places of marketisation and financialisation

Abstract

The underinsurance of property is pervasively and persuasively promoted as an indicator of risk and riskiness and, in Western nations, is assumed to be aligned with socio-economic disadvantage. Yet, the solution – in its most simple form, buying more insurance – lacks critical interrogation of what the problem actually is. To understand underinsurance better, we map house and contents underinsurance across two municipalities in Australia’s island state of Tasmania, and observe that the existing delineation of disadvantage and advantage between these two places is muted in relation to insurance – underinsurance does not straightforwardly map onto disadvantage. We provide an alternative explanation: that underinsurance is not a risk for households per se and does not represent riskiness on behalf of these households. Rather, it is indicative of household agency that produces place-specified responses within the processes of financialisation and marketisation. We observe that the growth in renting, driven in part by housing financialisation, is associated with property underinsurance. The history of renting as temporary and marginal informs renter decision making not to insure, and thus current financialised changes in housing co-produce rather than ameliorate underinsurance. We also conclude that in negating or resisting insurance marketisation, households garner everyday financial and material adaptative capacity by underinsuring.