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Insurance in Czech households
Fialová, Kamila ; Mysíková, Martina
Insurance increases household welfare by transferring uncertainty from risk-averse individuals to risk-neutral institutions. Thus, the main motive for purchasing insurance is risk aversion to avoid loss. Insurance can improve the financial resilience and overall financial stability of households, with particular importance for low-income households.\nHousehold demand for insurance depends on many factors, including the socio-demographic characteristics of household members, the economic structure of the household, the evolution of the macroeconomic environment, as well as institutional factors. Specific household preferences, attitudes and risk perceptions are also important. However, of all the factors, household income is generally cited as the most important as it has a major impact on demand for both life and non-life insurance.\nAlmost 60% of respondents have life insurance, the vast majority of them also use some form of non-life insurance (54% of all respondents). On the other hand, almost a tenth have no insurance at all. At least one of the considered forms of non-life insurance is generally used by the majority of the total respondents (84.4%), while only 31% of respondents have non-life insurance (and not life insurance at the same time).\nPeople with higher education and households with children are more likely to use insurance, which may be related to the motivation to secure their dependents. Household income and financial reserves have a significant impact. Low-income households are significantly less likely to take out insurance, which may be due to the fact that insurance is unaffordable for them. In contrast, households with long-term financial reserves are more likely to use insurance. Life insurance is also used more often by people who have other loans or credits besides a mortgage.\n
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