Nearly 16 million adults 'are without contents insurance'


Nearly 16 million adults across the UK have no contents insurance, according to a financial inclusion report.

The Financial Inclusion Commission (FIC), which includes MPs, peers and industry experts, said insurance is an unaffordable or unobtainable safety net for many people.

It found 60% of those earning £15,000 or less per year have no contents cover - and few would be able to replace their belongings with savings.

Being young, having a low income or living in a rented property are all factors behind not having home insurance, according to the report.

The report said industry data shows 1.2 million successful claims were made on household buildings and contents cover in 2016, with an average payment of just over £2,500 - but £2,500 represents a figure beyond the savings of many households.

Suggested options in the report include looking at ways to provide better access to household insurance for groups not currently well-served by the mainstream market and raising the profile of household insurance as part of wider moves to help financial inclusion.

The report said financial services and products need to be accessible, easy to use and meet people's needs - but while banking, credit and savings have come under the microscope in the debate about financial inclusion, insurance has been forgotten.

Sir Sherard Cowper-Coles, who chairs the commission, 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.

"Insurers pay out more than £8 million every single day in property insurance claims and it's good that this report recognises the benefits of more people having access to contents cover.

"Contents insurance offers peace of mind to millions of households and can be a financial lifeline when the unexpected happens - whether that is a burglary, a leaking pipe or a devastating fire."

A spokesman for the Association of British Insurers (ABI) said the insurance industry already offers affordable cover to the majority of social housing tenants via special schemes - but take-up remains low.

He said: "One of the main barriers which prevents people taking out cover is likely to be the squeeze on people's finances, with disposable household income falling.

"Property insurance premiums are currently at some of their lowest levels for more than a decade but repeated increases in insurance premium tax are putting this at risk."