Why Your Home Cover Needs Attention

Low home insurance adoption could be probably due to attention bias, which refers to our tendency to give greater importance to things that catch our attention and less to matters that are hidden. While this bias can be helpful sometimes, it can lead us to ignore important decisions, such as purchasing home insurance. Home insurance is often overlooked, even though a home typically represents a larger share of one’s wealth compared to, say, a car. This may be because the risks that threaten a home, such as natural disasters and human errors, are not perceived as imminent. Contrast this to car insurance, whose penetration is much higher because while driving in the city traffic, the possibility of someone bumping into your car is immediate and real. So, people have a higher appreciation for risks faced by their car and are comfortable paying hefty car insurance premiums every...