Your landlord will be insured for this kind of damage, but are the contents of your flat also insured?
Insurance is a necessary evil. It is something that everybody has to have.
We want to share some research from Aviva with you. According to the insurer, which provides cover for a quarter of all UK households, a large number of renters are putting themselves at risk by choosing to remain uninsured.
Aviva polled 2,057 people, including 567 respondents living in rented accommodation and 585 respondents who own their house with a mortgage.
The results show that the vast majority of renters who took part in the survey, don’t have any form of protection in place. This includes life insurance, critical illness cover or income protection resulting in them having trouble in paying their rent if they unexpectedly experience a drop in income. This compares very badly to homeowners as 60% of people with a mortgage have some kind of protection insurance in place.
Perhaps more worrying is the fact that only 40% of respondents living in rented accommodation have contents insurance. This equates to 90% of homeowners with a mortgage.
Aviva has calculated that almost six million renting households may be without any contents insurance cover at all, so will be unnable to make a claim should their possessions be damaged or stolen.
It is likely that this has resulted due to tenants, who are likely to spend a major proportion of their income on housing costs, have, basically, less ready cash. Aviva found that renters spend an average of 35% of their income on rent, compared to homeowners spending 25% on a mortgage.This increases to 40% in the private rented sector and is considerably higher for many people renting in London.
Those people who live in flats often feel they have added protection from theft. This may be due to block security, concierge staff or just knowing there are plenty of other people for thieves to choose from.
Fire, however, is a major risk and can often be devastating. Add to that leaks from neighbours’ flats are a regular risk and can quickly destroy fixtures and fittings as well as personal possessions. It does not pay to assume that your landlord’s insurance will cover you. It may well fund any redecoration if the bathroom upstairs floods but it may not pay out for anything that gets damaged. So, as a renter, it pays to consider contents cover. It is relatively inexpensive and easy to buy online. Hopefully you won't ever need it – but is it worth taking the risk?
Mary-Anne Bowring FIRPM FRICS FARLA FCABE Founder/Head of Asset Management
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Ian Barber MD BTR Mobilisation & Leasing
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