The UK’s rental insurance blackhole is slowly shrinking year-on-year, but still only half of private tenants (51%) have contents insurance, according to the findings of a new YouGov survey released today.

 

The survey, conducted with 1,013 private tenants and commissioned by General Insurance solutions provider Paymentshield, revealed a greater proportion of renters (53%) subscribe to a TV streaming service such as Netflix. This rises to 60% for respondents aged between 25-54.

 

The proportion of tenants with contents insurance has grown in recent years, rising from just 33% in 2020 and 46% in 2022.* However, Paymentshield warns that the lack of more widespread take-up and general awareness still poses significant financial risk to those in rented properties, particularly in the context of the rising cost-of-living.

 

London is a particular hotspot for low take-up, with almost three in five tenants (58%) in the capital not having tenants’ contents insurance. Worryingly, the survey also revealed that a greater proportion of renters in London had experienced a fire, flood or theft in their property in the last 12 months compared to other regions of the UK.

 

A further area of concern is that only one in five (20%) of all respondents who do have contents insurance said that their policy was specifically designed for tenants.

This means that, for the vast majority with insurance, it might not cover them for the range of scenarios that comes with living in rented accommodation, such as accidentally damaging the landlord’s property or belongings. Protection against this is known as liability insurance and is included as standard in Paymentshield’s tenants’ contents insurance.  

 

Half of tenants in the survey said they’ve never heard of tenants’ liability insurance, even though, collectively, respondents reported being more worried about accidentally damaging the landlord’s property or belongings than their own. One in five (20%) tenants aged 18-34 admitted to having damaged the landlord’s property or belongings before.

 

A perception that it costs too much was the single biggest reason cited by tenants for not having any form of contents insurance, with 42% of respondents listing this as a blocker – despite average monthly prices for a policy sitting within the same range as a Netflix subscription.

 

A monthly payment model is preferred by a significant proportion of tenants, with over two in five (42%) of respondents saying they’d rather take out a tenants’ contents policy on a monthly rolling basis, as opposed to 35% saying they’d rather pay annually.

 

The survey also revealed the value of tenants’ personal belongings that are at risk from not having contents insurance. One third (33%) stated that their belongings would add up to over £10,000, and of this group, almost one in five (17%) do not have insurance. Almost three in ten (27%) retired respondents do not have contents insurance, despite a higher proportion of this cohort possessing higher-value items.

 

When asked how they would pay to replace possessions that were damaged beyond repair, three in ten (30%) of all respondents said they would save up from scratch, and nearly one in five (17%) would put themselves into debt – borrowing from friends or family, or putting it on a credit card or overdraft.

 

Rana Ali, Director of Distribution for Lettings at Paymentshield, says:

“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 important of insurance, and prompt them to purchase it at a timely point in their rental journey.

“We’re working with partners in the rental chain to do just this, embedding our technology into their online platforms to automatically provide tenants with a quote, and offering monthly payment options that better align with consumer preferences. 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?” 

Article last updated: 08/06/2023

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