UK renters continue to ditch renters’ insurance, mistakenly thinking that their landlord has insurance in place to cover their contents. However, with landlord policies typically providing cover for the building and white goods, renters remain vulnerable to theft and other damage to their personal property.
According to GlobalData’s 2020 UK Insurance Consumer Survey, only 45.5% of renters have contents insurance, compared to 93.9% of homeowners. 24.5% of renters did not purchase contents insurance because they believe their landlord already has cover in place.
However, these policies will not cover tenants’ personal items like clothes, jewellery, and electronics. This leaves renters vulnerable to theft and damage to their items resulting from a flood or fire. Insurers need to raise awareness among renters that landlord policies will not cover their personal property and should form relationships with lettings agencies to inform renters when they sign their lease.
A further 20.2% of renters believe policies are too expensive. With renters likely to have lower incomes than homeowners or those buying a home on a mortgage, keeping the cost of policies down is key to improving the uptake of contents insurance among this group. There are therefore clear incentives for providers to offer customizable policies, whereby renters can pick and choose the items they want cover for. Providing monthly policies, rather than locking renters into a 12-month policy, will also help, offering consumers the flexibility to defer cover if their budget changes.
These two considerations are key in order to improve renters’ insurance uptake, by first raising awareness about the limitations of landlord policies and then providing policies that are attractive to renters.