Embargo: for publication after 00.01hrs Friday 27th March 1998
Survey finds one in five households without home contents insurance

One in five households are without home contents insurance, according to a national survey supported by the Joseph Rowntree Foundation. These included a high proportion of those most likely to need such insurance.

It found that uninsured households were disproportionately likely to have low incomes, few savings and to be facing financial difficulties. Most were tenants living in disadvantaged urban neighbourhoods where the risks of burglary meant that insurance premiums were higher than elsewhere.

Researchers at the Policy Studies Institute and Institute for Public Policy Research found about half those who were living in uninsured households had held home contents policies in the past, but had let them lapse usually because of money problems. The remaining half tended to be people living on very low incomes with no bank account and little contact with companies selling financial services.

Most of those interviewed were aware of the potential problems they faced through having no insurance, especially the risks of burglary. One in seven had actually lost possessions through theft, fire or flood and either been unable to replace them, or else compelled to borrow within their families or from the Social Fund.

The research, which included case studies of insurance companies and brokers, found the industry's claim that the great majority of households could get access to home contents insurance was generally justified. Relatively few low-income households had ever been refused insurance outright.

However, it was evident that mainstream insurance products were often inappropriate for people on low incomes. Conditions attached to policies such as high minimum sums insured and 'excess' payments to be met by the householder served as a deterrent for those with little cash to spare.

Even so a number of insurance companies were specifically targeting low-income households by working in commercial partnership with intermediaries, including local authorities, housing associations, credit unions and charities for the elderly. Just under half all local authorities and one in five housing associations were offering home insurance schemes designed for their tenants.

Claire Whyley, co-author of the report, said: "More can be done by the insurance industry and social landlords to ensure that of the one in five households who are currently uninsured, a significant proportion are offered affordable and appropriate home contents insurance. The entry of local authorities, housing associations and other intermediary 'gatekeepers' into the insurance market has already widened access to home contents insurance for many households who would not otherwise have been able to obtain it."

Note to Editors
Paying for peace of mind: access to home contents insurance for low-income households by Claire Whyley, James McCormick and Elaine Kempson is published by the Policy Studies Institute and available from Grantham Book Services, Isaac Newton Way, Alma Park Industrial Estate, Grantham, Lincs. NG31 9SD (01476 541080), price £14.95 (plus £2.50 p&p). 

A summary of findings from the report is available here.

(Issued by David Utting, JRF Adviser, 020-7278 9665 )