Millions of low-income renters risk financial difficulties due to lack of insurance

July 25, 2019
low-income renters risk financial

Millions of renters are at risk of financial difficulties because they are not sufficiently insured, according to a new report.

 

Independent research for Aviva found 2.5 million renters in low-income households were found to have no contents insurance despite these renters being more likely than other group to suffer damage or loss from burglary, fire or flood.

 

Seven in ten (73%) low-income renters say they would find it impossible to meet an unexpected bill of £500, with nearly one in three low-income renters relying on credit cards or high interest payday loans to cover loss or damage.

 

Of those who have had to find a way to replace damaged or lost possessions, 95% said their long-term finances had been affected to some extent.

 

Insurance can cost as little as £1.30 a week for social housing tenants, but just 37% have sufficient cover.

 

The study found 61% of UK renters in households with an income under £17,000 have no contents insurance and yet one in three (33%) have had a potentially insurable loss in the last five years, rising to nearly half (47%) amongst 18-34-year olds.

 

Of those without contents insurance, 27%, a figure equivalent to 250,000 people, have relied on credit to replace or repair their belongings.

 

And a lack of insurance doesn’t just have an effect on their finances – the research found one in five (38%) would find replying on credit to replace losses of £500 highly stressful and would have an impact on their mental health.

 

The report called on the government, insurers and organisations to social and private rented housing to build on existing initiatives to minimise the impact on this already vulnerable section of society.