"It's clear that lack of awareness is a big factor contributing to the insurance gap among renters. When asked why they don’t have a contents insurance policy, 11% of respondents said it’s because they have simply never been offered it"
- Rana Ali - Paymentshield
The significant majority of homeowners wouldn’t dream of not having contents insurance in place to protect their belongings, but when it comes to tenants, it’s a different picture entirely. Millions of renters in the UK are exposed financially to damage or theft to their possessions because they don’t have adequate insurance.
A YouGov survey we conducted earlier this year with over 1,000 private tenants in the UK revealed that only 46% of tenants surveyed have a contents insurance policy. Almost the same amount, 47%, have nothing in place at all (and the remainder didn’t know). Younger tenants appear particularly underserved, with 61% of this cohort lacking contents insurance.
The number of respondents with contents insurance has actually fallen slightly from 51% since our previous survey in 2023, perhaps reflecting market pressures of rising rents and a prolonged cost-of-living crisis.
What’s more, only one quarter of those tenants with contents insurance said they have a tenant specific policy. This means that, for the vast majority with insurance, it might not cover them for the range of scenarios that comes with living in rented accommodation, such as accidentally damaging the landlord’s property or belongings.
When we asked tenants why they don’t have any form of contents insurance, 28% of respondents told us they don’t have enough items to justify purchasing a policy. But that doesn’t tally with what we discovered when we asked more specific questions about the value of their household belongings.
Close to one in five (19%) respondents said their household belongings are worth less than £5,000. One in four actually valued their belongings between £5,000 and £15,000, and a further one in four said over £25,000. This highlights an alarming gap between perception and reality, and that – unless directly prompted to consider it – many tenants would underestimate how much their possessions would cost to replace.
It's clear that lack of awareness is a big factor contributing to the insurance gap among renters. When asked why they don’t have a contents insurance policy, 11% of respondents said it’s because they have simply never been offered it.
This highlights the importance of timely prompts and is why we’ve been working hard with our lettings partners to make it an embedded and seamless part of their existing online rental journey. Our research suggests that if tenants were offered contents insurance at the right moment – for example, during the referencing stage – they’d be more likely to take it up.
Respondents to our survey actually showed an appetite for stronger action. Over a third (37%) said they believe it should be mandatory to be prompted to purchase contents insurance when taking out a new tenancy, showing significant support for the idea of lettings firms introducing the product.
Educating tenants is equally critical in closing the protection gap, and every party in the rental chain has a responsibility here. Many renters simply aren’t aware of what contents insurance covers, how affordable it can be, or the risks of going without it. We know, for example, from our 2023 survey, that half of tenants said they had never heard of tenants’ liability cover - even though, collectively, they reported being more worried about accidentally damaging the landlord’s property or belongings than their own.
By embedding not only the product but also clear, digestible information into the rental journey, we can help tenants make more informed decisions. Currently, too many tenants would rather reactively spend than proactively protect, taking a huge financial risk that could leave them thousands of pounds out of pocket. This has dangerous implications for the rental market as a whole – it isn’t good for anyone in the chain.
We’ll be continuing to monitor the protection gap among tenants, and our hope is that over the next few years we’ll see it steadily shrinking. By working closely with lettings partners, we can bridge the gap. Helping tenants protect what matters most to them shouldn’t be an afterthought — it should be a logical and effortless part of the rental experience.
