Younger renters are at more risk of underinsurance for their home contents policies than older residents, a study finds.
Over two-thirds of residents aged under 25 years old were unfamiliar with the potential pitfalls that come with under-insuring their rented possessions, whereas just 17% of over-54s were in the same shoes.
There were three main blind spots that younger residents experienced with their contents insurance that left them susceptible to missing out on being paid properly when making a claim.
Only a small number of that age group surveyed by Go Compare knew how to calculate the value of possessions (15%). A similar number were aware of what single-item limits are (14%), and just 15% kept an up-to-date list of what possessions are listed under their policy.
Despite needing the issue to claim any money back on their damaged or stolen possessions, the issue is more apparent in renters than homeowners, as almost half (47%) were also unaware of those three potential pitfalls.
Basic home contents knowledge lacking in the majority of under-25s
In comparison, at least over half of the older cohort kept their contents list up to date (57%) and knew what a single-item list was (53%), and over a third (34%) could give an accurate valuation of their goods.
The lack of awareness when it comes to the limit you can claim on one item under your policy could again mean younger residents will miss out on the correct funds for their claims.
Ceri McMillan, home insurance expert at Go Compare, said: “It’s shocking to see that so many might not have the coverage they need to keep their possessions safe, particularly younger generations and those living in rented accommodation.
“Millions of pounds are at risk of being lost, highlighting that many of us need to take action to make sure our possessions are properly protected.
McMillan added: “While it might not be the first thing on your mind, it’s critical that you update the value of your contents regularly. Otherwise, you risk being underinsured and might not get the funds you need in a worst-case scenario like a fire, flood, or theft. This results in the cruel double-whammy of losing your possessions and having to absorb the financial cost of replacing them.
Car insurance premiums also skyrocket for younger drivers
Not only are young residents at risk of missing out on claiming correctly for their property and blighted by extortionate rent, but young drivers also face increasingly hefty premiums to cover their car insurance.
The cost to cover your car if you are aged under 25 rose by £644 in January 2024 to £2,009, Compare the Market’s data finds. This has sped up the amount young drivers have to pay so they can keep their car on the road, with prices shooting up to £3,043 per year, compared to £2,436 in 2023.
If you are a younger person battling to make the most out of your insurance policy, here are three tips from Ceri McMillan on how to avoid being a victim of underinsurance.
How to dodge falling into underinsurance
Revalue regularly
A good way of getting into the habit of updating your insurance is to make sure you revalue your possessions whenever your policy renews. You should also consider updating it after you’ve made any big purchases, such as jewellery or tech, or after big occasions like Christmas and birthdays where you might have an influx of new possessions.
Double-check the policy for expensive items you hold
If you do make any big purchases, be wary of single-article limits that might be on your policy, too. For anything you buy that might be worth more than £1,000, double-check that your policy will provide sufficient coverage. You might need to inform your provider about these so that they can be listed individually.
Use online tools for valuations
“Many people find it difficult to provide an accurate estimate, but there are ways you can get support with this. Our online contents insurance calculator can help you come to a realistic valuation, so consider trying this if you’re struggling.”
