Insurance Cares: 16m without contents insurance

A report by the Financial Inclusion Commission (FIC) has highlighted huge gaps in insurance coverage across the UK.

The body, which is a cross-party campaigning organisation made up of experts, MPs, Peers and social-policy leaders, found that 16m (35%) people in the UK do not have contents insurance.

The report, entitled Access to Insurance, also found that 60% of those earning £15,000 or less per annum have no contents cover and few of these people could afford to replace lost belongings.

Renting
The study indicated that being young, having a low income or living in a rented property are all factors for not having home insurance. Moreover, those in social housing tend to be found in areas of higher crime, and renters themselves are less able to afford the annual premiums.

The report also learned that those in vulnerable circumstances are also likely to lose out: older people, for example, tend not to have the knowhow to handle the industry-wide move online, and younger people struggle with financial capability: 19% of adults find information provided by insurers difficult to understand.

Insurance Age has developed the Insurance Cares campaign to raise awareness of vulnerable customers and work to develop ways to help them.

In addition the document further stated that, for many, contents insurance is made unaffordable because their financial situation prevents them paying often cheaper annual premiums and from purchasing comprehensive cover.

Recommendations
The report sets out a number of steps to help more people, including the vulnerable, gain access to insurance. These include:

• Increasing access to contents insurance coverage for both social tenants and private tenants;
• Providing better access to household insurance for other groups who are not well served by the mainstream market;
• Increasing the profile and understanding of household insurance as part of a wider financial inclusion agenda; and
• A collaborative approach with Government, regulators, insurers and others, with the former to take overall responsibility through a national strategy.

Sherard Cowper-Coles, chair of the FIC, said: “The findings in this report are a reminder of the challenge we face in furthering financial inclusion. For many, insurance is an unaffordable or unobtainable safety net.

“Government must push for a strategy that widens access to quality cover, so that everyone has immediate access to a capital buffer in case of loss.”

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