"These findings show we're at a pivotal moment for the rental insurance market, but tenants need to be informed about the potential changes that could impact their livelihood"
- Rana Ali - Paymentshield
Fewer than half of UK private tenants currently hold contents insurance, according to a new survey commissioned by general insurance technology provider Paymentshield. The results point to a widening rental insurance gap, with the percentage of insured tenants dropping from 51% in 2023 to 46% this year.
The survey, conducted by YouGov with over 1,000 private renters, suggests the ongoing cost-of-living crisis and rising rents may be discouraging tenants from taking out protection for their belongings.
When made aware of proposals in the Renters’ Rights Bill, specifically provisions allowing landlords to require tenants to hold insurance for potential pet damage, 27% of respondents said they would likely take out a policy within the next 12 months. Pet damage cover is included as standard in Paymentshield’s tenants’ contents insurance.
However, a recent amendment to the Bill could reverse this proposed requirement. The legislation is due to return to the House of Lords in early July for further scrutiny during the Report stage.
The research also reveals that tenants may be open to other prompts to obtain coverage. Almost 37% believe landlords should encourage renters to purchase contents insurance.
One in five respondents cited a lack of awareness as their reason for not having a policy, indicating an opportunity for lettings professionals to educate clients on the importance of protection.
Despite some tenants believing they don’t own enough to justify insurance, 28% of uninsured respondents shared this view, the figures suggest a disconnect between perception and reality. According to the research, 62% of tenants value their possessions at over £5,000.
A quarter of respondents estimated the value of their belongings to be between £5,000 and £15,000, while another 25% placed the figure above £25,000. This suggests a significant underestimation of both the worth of possessions and the potential cost of replacing them in the event of a loss.
Beyond covering pet-related damage, contents insurance typically includes protection against incidents such as theft, fire and flooding, offering essential financial security for renters.
“These findings show we're at a pivotal moment for the rental insurance market, but tenants need to be informed about the potential changes that could impact their livelihood,” said Rana Ali, director of distribution for lettings at Paymentshield. “The industry has a clear role to play in closing this information gap.
“We’ve worked hard to make uptake of contents insurance policies as straightforward as possible, developing slick technology to embed the insurance journey into the existing online journeys of our lettings partners, and introducing a pay monthly policy. With over three in five respondents having possessions worth more than £5,000, the financial risk of being uninsured is simply too great to ignore,” Ali added.
