More than two million privately rented households in the UK have no insurance policy on their properties, despite the contents of an average property amounting to £25,126, according to a new poll.
The gap in cover is shown in new research by Nationwide Building Society as it highlights the need to protect belongings in homes, regardless of whether they are owned or rented.
Nationwide’s survey of more than 1,000 tenants1 reveals only around half (52%) of the UK’s 4.44 million private renters2 have arranged contents insurance, which is designed to cover the cost of repair or replacement of contents in your home if they are lost, stolen, or damaged by something covered by your policy.
This could leave 48 per cent without any contents cover at all – amounting to 2.13 million households across the UK as 22 percent have no contents cover and a further 26 per cent don’t know if they have any cover or not
Close to a fifth (19%) of renters mistakenly believe that it is the landlord’s responsibility to arrange contents insurance, while many others put off arranging cover as a way of reducing their monthly outgoings. However, this could prove to be a costly mistake as the contents of an average rental property is valued at £25,126.
Despite many renters not having contents insurance, around half (48%) worry that they will cause damage. This is perhaps no surprise given accidental damage is the top reason for home insurance claims at Nationwide and cited in the poll as the most important consideration when taking out home insurance.
The most important elements of home insurance for renters are:
- Accidental damage – 22%
- No fees for changing of cancelling the policy – 12%
- Home emergency cover – 11%
- Ability to pay monthly at no extra cost – 10%
- Tenant liability cover – 9%
The research from Britain’s biggest building society also highlights than many renters are paying for cover they just don’t need, with more than a quarter (26%) paying for buildings insurance, which is the responsibility of the landlord. A third (32%) also admitted to forgetting to cancel the policy when they moved out of their rented accommodation.
Landlords step up to protect renters
This lack of awareness around home insurance cover could also leave many renters in breach of their tenancy agreements as a third (34%) said they didn’t know if it was stipulated in their contract that contents insurance is required. According to the research, some landlords are starting to clamp down on tenants, with 39 per cent being required to arrange contents insurance and more than two thirds (67%) of landlords asking to see proof of contents insurance before they could sign their tenancy agreement.
Darren Black, Head of General Insurance at Nationwide Building Society, said: “It’s concerning that many renters don’t have contents insurance andare living under the mistaken belief that their landlord has cover in place to protect their belongings if they are lost, stolen or damaged. They could also be putting their tenancy at risk as many landlords stipulate that they must have cover in place as part of their tenancy agreement.
“When finances are tight, insurance can seem like an unnecessary expense, but without it you could end up losing everything you own. The majority of home insurance claims are for accidental damage, particularly at the moment when many of us are spending much more time at home. For a few pounds a month, home insurance can provide real peace of mind that you are protected should the worst happen.”
1 Survey of 1,002 renters in the UK conducted by Censuswide between 4-6 January 2021
2• English housing: private rented households 2020 | Statista (calculation: 48% of 4.44 million privately rented households = 2.13 million)
About Nationwide Building Society
Nationwide is the world’s largest building society as well as one of the largest savings providers and the second largest mortgages provider in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers and members.
Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 employees. Nationwide’s head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.
This article is syndicated from Daily Finance.