Figures indicate that almost one in five UK households are not protected by home insurance policies, which cover the contents of their houses. This has resulted in almost 154 billion worth of valuables remaining uninsured, according to research from an
insurance website.
Of the 3.9 million occupiers, which accounts for 18 per cent of UK homeowners, who currently forgo contents insurance, 1.75 million of them are putting blame on the current economic climate, citing it (
home insurance cover) to be a luxury they cannot afford as the recession tightens its grip on their finances.
In addition, the research also revealed that 16 per cent of people have never even thought about taking out a home contents insurance policy, while a further 18 per cent do not think the risk warrants the expense. This is a nave frame of mind, considering that recent crime statistics indicate that there has been a 4 per cent rise in the number of domestic burglaries.
Renters more likely to cut cover
Several cases that involve limiting the level of contents cover are seen particularly when examining the rental market. People who rent render themselves particularly vulnerable, with 30 per cent failing to secure cover for their possessions. Whereas, in comparison, just 6 per cent of home owners limit the cover of their homes content.
This is despite the fact that 73 per cent of tenants admit they wouldn't be able to afford to replace their valuables if they were stolen or damaged. Misconceptions are also rife amongst renters with 11 per cent assuming they're automatically covered by their landlord's policy.
Mark Monteiro, Insurance Expert at the website, said: "We are fast becoming a nation of contents cover scrappers, as renters and homeowners try to cut back and save money during the current recession. The fact that nearly half of homeowners and renters alike don't feel they can afford home contents insurance at the moment is a worrying sign of the times.
He also added: Yet, with recent crime figures revealing domestic burglaries to be on the up, as has proven the historic norm in a recessionary climate, consumers are running the gauntlet by putting themselves increasingly at risk simply to make a short term saving. It is crucial to remember that the long term financial consequences of being a victim of burglary or suffering damage to your property and possessions will be far more devastating if you are not adequately covered"
Students content should be covered
The student age bracket of 18-24 year olds was revealed to contain the highest level of offenders, with 39 per cent failing to secure their own cover for possessions. This is a drastic case as figures show that students own more expensive consumer goods per head than the rest of the population.
Some of these students may be covered by their parent's home contents insurance but this may not always be the case and depends on individual policy terms and conditions. In addition, young people are around three times more likely to be victims of burglary than people in other age groups, making them all the more vulnerable if they are underinsured.
These statistics are particularly concerning as there is an apparent surge in UK rental. Housing tenure statistics indicate a substantial increase in the size of the private rented sector, from 2.7 million in 2007 to nearly 3.0 million in 2008, with private rentals now accounting for 13.9 per cent of households, the biggest share since the 1970s. This increase is mainly due to affordability issues as first-time buyers struggle to get on the housing ladder and property owners who are forced to rent properties they can't sell.
Monteiro concluded by stating: "Home contents insurance, though not legally required, should be regarded as a necessity.
