Mortgage owners more likely to take insurance than renters
Mortgage owners take out insurance policies more than renters, data and analytics company GlobalData has found.
Some 35% of people with a mortgage take out life insurance compared to 17% of renters.
Meanwhile, 26% of homeowners with a mortgage take out income protection which is over five times the number of renters that do.
GlobalData said this substantial gap is likely due to the lack of awareness of products that can benefit renters.
Yasha Kuruvilla, associate analyst at GlobalData, said: “During the mortgage application process, most people will meet with a financial advisor or mortgage broker to discuss different options.
“The topic of life insurance or income protection as a means to cover the cost of a mortgage in case of unforeseen mishaps is often discussed at this time.
“However this conversation is unlikely to be held with renters because the majority do not meet with an adviser or insurance broker prior to entering into a tenancy agreement.
“This leaves this group of people much less protected, despite having similar monthly commitments to mortgagors.
“To address this issue, insurers should work with letting agencies and popular rental platforms such as Zoopla and SpareRoom to highlight these products to renters and get them thinking about the benefits they bring.”
Legal & General recently distributed three products specifically aimed at protecting renters.
Kuruvilla said more needs to be done to raise awareness about the benefits these products bring.
Kuruvilla added: “The three new products rolled out include rental income protection, rental life insurance and rental life insurance with critical illness cover.
“While these three products are tailored specifically to renters, they provide the same sort of protection as their counterparts for mortgage holders.”