Insurance isn’t exactly the most exciting of topics, but it’s one of the most important. However, the percentage of 20-39-year-olds (also known as “Generation Rent”) who are privately renting their home has rocketed to 50% since the turn of the millennium, and many of these tenants are not covering themselves with relevant insurance products.
According to a PwC UK Economic Outlook report, the growing trend of increased generations renting properties is set to continue across all age groups and is projected to rise by 14.5% over the next 10 years, with private renting expected to jump from 9.4% of national households to 23.9% by 2025. This jump is largely due to many Millennials struggling to afford the average UK property price of £220,713 (as of May 2017), so until home ownership becomes more affordable, renting is likely to remain a popular, slightly necessary choice across the country.
Despite bad experiences in the past, “Generation Rent” are still largely opting against taking out proper insurance. Contents insurance is designed to protect your personal belongings inside your home against loss, damage by theft or attempted theft, water leakage or flood damage, fire, explosion or natural disasters. Nevertheless, a Guidewire survey from 2016 found that 60% of young working adults aged 20-30 have chosen to ignore the importance of protecting their own personal possessions. Of those surveyed, over half (55%) claimed to have lost or damaged personal belongings while uninsured, but 60% stated that this did not lead them to take out contents insurance. When young people were found to be motivated enough to take out contents cover, 52% of them admitted that they were unaware of what would happen to their policy if they chose to move home.
The majority (55%) of survey respondents claimed the reason they do not have insurance is because they believe it would cost too much, while 24% said it was due to them not owning anything worth insuring. Just over one in ten (12%) said that they haven’t taken out cover because they do not understand insurance.
Perhaps, the most worrying find of the survey was the fact that quite a number of young people believe the responsibility of insuring their personal belongings rested with somebody else. The Guidewire survey revealed that 16% of “Generation Rent” held their landlord accountable for insuring their belongings, though the reality is that the landlord is only responsible for insuring the building and any furniture that they provide as part of the tenancy. It is the responsibility of the tenant themselves to insure their own personal belongings.
For those young people struggling with their finances, insurance is likely to be the last thing on their minds. However, the possibility of a costly loss due to a fire, theft or whole host of other reasons should indicate that an insurance purchase is the sensible choice.
At CPS Homes letting and estate agents, we’re experts in property, whether it be buying or letting. If you’rea landlord looking to let your property, or someone looking to rent a Cardiff property, our experienced lettings team is here to help. To find out more about the services we offer, get in touch today on 02902 668585, email firstname.lastname@example.org or pop into one of our three Cardiff branches in Cathays, Cardiff Bay or Roath.