The research comes at a time when insurance premiums are skyrocketing and natural disasters are increasing in frequency and impact due to climate change.
When it comes to measuring household wealth, the Australian Bureau of Statistics divides Australians into five groups. Using the same groups, the new research has found that those in the middle and those with just-below-average wealth are at extraordinary risk.
The average "middle Australian" household has $316,000 of equity in the family home and a net worth of $437,000, which takes into account other assets, like superannuation; and debts, like the balance of a mortgage.
The research has found that if they were not insured and lost their home in a flood, fire or other natural disaster, they'd lose 74.3% of their overall wealth.
Those in the next group down the wealth ladder, with a net worth of $252,600, would lose 74.7% of their overall wealth.
The report finds a growing number of households are now experiencing "extreme home insurance affordability pressure" and reveals that many are thinking about dropping insurance due to the soaring cost.
The report comes with new polling, which found that almost one in five Australians admit their home is uninsured or underinsured. That represents around 1.4 million homes at risk.
"Australian families are facing an almost impossible choice when it comes to home and contents insurance," said Matt Grudnoff, Senior Economist at The Australia Institute.
"They either find the money to pay ridiculous premiums or risk losing everything they own.
"At a time when we're experiencing more regular and more severe floods, fires, storms and cyclones due to climate change, more Australians have been abandoned by greedy insurance companies. It's not fair. It's not right."
