Renters take out contents and car insurance so why aren’t they covering their greatest asset – their income?
The question was posed by Joanna Streames, managing director of Velvet Mortgage and Insure Services (pictured), who was speaking on the fourth day of the Income Protection Task Force’s (IPTF) Income Protection Awareness Week.
Streames explained that renters need income protection (IP) because they are at risk of being evicted by their landlords if things do not work out and do not benefit from the luxury of having equity in their home or being able to sell up.
According to Streames, around 50% of renters have contents insurance and those that drive are required to have car insurance.
But she pointed out that the average number of years a person works is 32 and over that time they will build up their greatest asset – their income.
“If we look at the UK average salary which is just under £31,500 and we times that by the average 32 years that they say people will work, that’s just over £1m, so everyone’s income is generally their biggest asset,” Streames said.
“No contents are worth that amount of money generally in people’s homes, so renters need that income to pay their landlord and stay in their family home. It’s super important that we try and get this message across to tenants that are renting.”
But renters with income protection also provide peace of mind to their landlords, Streames added.
“It is a really good thing for landlords as well because if landlords knew that their tenants had that cover in place, that would give them more peace of mind also.
“More renters are paying for contents insurance – about 50%. And if people realise that they could get this type of protection for similar to what they are paying for their contents and their car insurance and they are eligible for it, I think they would be much more interested in protecting their income.”