Low home insurance uptake among renters leaves them vulnerable to unexpected costs
The English private rented sector has doubled in size since the early 2000s, according to the English Housing Survey, accounting for 19% of households in 2019–20. But renters are much less likely to purchase home insurance than homeowners, leaving them exposed to accidents in the home.
45.2% of private renters held a home insurance policy in 2020, according to GlobalData’s 2020 UK Insurance Consumer Survey. Among homeowners (those who own their home outright or are buying it on a mortgage), this proportion increases to 91.2%.
While landlords are responsible for the costs associated with the building and built-in fixtures, their insurance policies will generally not cover renters’ possessions. Renters may also be liable for damage to the landlord’s property outside of the usual wear and tear. Policies that offer tenants’ liability cover will provide cover for these situations so that renters’ deposits remain untouched. Therefore, renters can find themselves footing a large bill in the event of theft or an accident in the property without any insurance cover.
31.4% of renters did not take out home insurance because they believe their landlord has insurance cover for their tenants. A further 21.0% do not think they need insurance cover, and 14.1% are not sure how long they will be staying in their current location.
Tenants’ contents insurance providers should therefore highlight that landlord insurance generally does not cover tenants’ possessions and that individuals generally underestimate the value of their home’s contents. Allowing policyholders to easily change their rented address will also make tenants’ insurance more attractive to them. Doing so will improve insurance uptake for this growing demographic and reduce the number of households that could be out of pocket if the worst should happen.