Less than half of tenants have contents insurance

Only 46% of the UK’s private tenants currently hold contents insurance, down from 51% in 2023 in the face of rising rents and the ongoing cost-of-living crisis, a survey reveals.

Insurance tech provider Paymentshield says the results suggest the rental insurance gap is widening.

The survey, which polled more than 1,000 tenants across the UK, comes as the Renters’ Rights Bill goes back to the House of Lords this week.

Tenants need insurance information

Rana Ali, the firm’s director of distribution for lettings, said: “These findings show we’re at a pivotal moment for the rental insurance market, but tenants need to be informed about the potential changes that could impact their livelihood.

“The industry has a clear role to play in closing this information gap.”

He added: “We’ve worked hard to make uptake of contents insurance policies as straightforward as possible.

“With over three in five respondents having possessions worth more than £5,000, the financial risk of being uninsured is simply too great to ignore.”

Bill was mandating pet insurance

The Bill initially included a provision allowing landlords to mandate insurance for pet-related damage, a feature already standard in Paymentshield’s tenants’ contents policies.

When informed of this, 27% of tenants indicated they would likely purchase a policy within the next year.

However, a late amendment to the Bill may remove this requirement, leaving the future of such mandates uncertain as peers prepare to review the legislation.

Despite the potential change, tenant interest in contents insurance remains strong.

Landlords should encourage insurance

The firm says nearly two in five (37%) respondents believe landlords should encourage tenants to secure coverage.

Also, one in five tenants point to a lack of awareness as the primary reason for not having insurance – highlighting a need for better education within the lettings sector.

The survey also revealed a disconnect between tenants’ perceptions and the actual value of their belongings.

While 28% of uninsured tenants claimed their possessions weren’t valuable enough to justify coverage, 62% of all respondents estimated their belongings to be worth more than £5,000.

One-quarter valued their items between £5,000 and £15,000, and another quarter placed their possessions’ worth above £25,000.

This suggests, the firm claims, that many tenants are underestimating their financial exposure to risks like theft, fire or flooding, all of which contents insurance typically covers.