0:04 AM, 1st June 2023, About 4 months ago 4
A study has found that while 53% of private tenants subscribe to a TV streaming service like Netflix, only 51% have contents insurance for their rented homes.
The findings from general insurance provider Paymentshield, highlight that this proportion increases to 60% for those aged between 25-54.
Although the percentage of renters with contents insurance has risen from 33% in 2020 to 46% in 2022, the insurer says that a lack of widespread adoption and awareness still poses a significant financial risk to tenants.
London renters are particularly vulnerable, with 58% lacking tenants’ contents insurance and a higher proportion in the capital have experienced fire, flood or theft within the past year.
Rana Ali, a director at Paymentshield, said: “Our research shows that too many tenants would rather reactively spend than proactively protect, taking a huge financial risk, and this is largely down to a misconception that tenants’ contents insurance is too expensive.
“There’s still a lot to do to educate tenants, of all ages, on the importance of insurance, and prompt them to purchase it at a timely point in their rental journey.”
He added: “We really believe that when tenants see it’s cheaper than they thought it was, they’re much more likely to purchase.
“After all, if you can afford to pay for a monthly Netflix subscription, why wouldn’t you spend the same amount on protecting your worldly belongings and against damaging the landlord’s property?”
Another finding is that just 20% of respondents with contents insurance have policies specifically designed for tenants.
That means the majority potentially unprotected for various scenarios unique to renting, such as accidentally damaging the landlord’s property or belongings.
Half of the surveyed tenants were unaware of tenants’ liability insurance, which covers such accidental damage incidents.
When asked, the main reason tenants gave for not having contents insurance was the perceived high cost, with 42% citing this as a barrier.
However, the average monthly price for a policy is similar to that of a Netflix subscription, the insurer says.
Also, 42% of respondents preferred a monthly payment option for tenants’ contents insurance, compared to 35% who favoured an annual payment.
One-third of respondents estimated their possessions to be worth more than £10,000, with 17% of this group lacking insurance.
And 27% of retired renters don’t have contents insurance, despite possessing higher-value items.
When asked about replacing damaged possessions, 30% of tenants said they would save up from scratch, and 17% would resort to debt – borrowing from friends or family or using credit cards or an overdraft.
Previous ArticleUK's property transactions fall by a third in a year