Juggling risks: insurance in households struggling with financial insecurity

Insecure work, low and fluctuating wages, inadequate and unreliable welfare payments, and escalating household costs are increasing the risk of financial harm for many Australians. There is a pressing need to understand how lower income households cope with the heightened economic risks they are facing. This research report draws on findings from the Spinning the Plates study, which aimed to shed light on the links between risk, financial uncertainty, inequality and poverty through the lens of insurance. We investigated the financial practices, understandings, hopes and fears of 75 households to gain insight into what people do—their financial repertoires (Daly 2015)—and how they make sense of risk in everyday life (Zinn 2017). To understand why people do or do not have insurance coverage requires an examination not only of individual and household practices, but also of broader social policies and the socioeconomic context. The report first outlines three key contextual themes. We consider the shift of risk and responsibility to individuals and households in the context of increasing income insecurity, inequality and the financialisation of daily life (Martin 2002). We also consider the economic and moral assumptions underpinning the general insurance market. Drawing on a review of relevant literature, we then appraise the ways low-income households manage risk in their particular contexts. We focus on the importance of time, emotional relationships and family traditions in financial decision-making. Next, we introduce the Spinning the Plates study, considering its rationale, methods, scope and limitations. Drawing on interview and survey data we then examine why respondents did or did not take up several forms of insurance—health, house, contents and third party property car insurance. We conclude by raising some policy implications, particularly the need to ‘decommodify’ and re-socialise many financial risks (Esping-Andersen 1990). Without stronger social protections, people experiencing economic insecurity will be increasingly exposed to risks against which they cannot insure. This greater exposure has implications for individuals, households, communities and overall social cohesion. We argue that unless economic security is enhanced in labour, welfare and finance markets, forthcoming changes in insurance are likely to increase individual, social and economic risk.