Home insurance threat to low-income homes

Some three million families with low income have no home insurance, which poses a big financial risk to them, new figures show.

Home insurance is particularly important to these households, as they are twice more likely than other families to be burgled, according to Royal SunAlliance.

In the last decade, the number of council house tenants with no home contents insurance has increased to 61 per cent from 55 per cent.

Not having enough cash, the design of home insurance products and misconceptions about insurance were the reasons cited by the majority of those without proper insurance for their lack of cover.

Think-tank Demos, working with charity Toynbee Hall, compiled a report that calls on local authorities and social landlords to prioritise home contents insurance for tenants.

The report suggests that with-rent insurance should be linked to the process of transfer of ownership.

For many of our clients even accessing a bank account can be difficult, leaving other financial products, such as insurance, as a distant aspiration, said Alice Rogers, coordinator of Services Against Financial Exclusion (Safe).

Those on low incomes need insurance that is not only affordable but which is tailored to meet their needs and fears, added John Craig, a senior researcher at Demos.

He says insurance companies can provide this by combining insurance with reassurance.

Insurance companies should show that their insurance products not only represent good financial sense, but a better life, he says.

Mr Craig says this can be achieved if insurance companies get involved in all aspects of the tenants' accommodation, from replacing broken windows to protecting against bogus callers.