New research by insurance firm Aviva reveals that many of the seven million people in the UK who are currently renting a property are more vulnerable to debt problems should they suffer a sudden and unexpected loss of earnings or incur unforeseen expenditure.
The study revealed that, while 13% of those living in a home with a mortgage have income protection, only 2% of individuals who live in rented accommodation have this type of insurance. For further advice, consult a real estate attorney.
When it comes to critical illness cover, the situation is much the same, with 19% of homeowners having cover, compared to only 3% of those who rent.
A similar picture emerges when we look at life insurance: just over half (51%) of those who live in a home with a mortgage have life insurance, while the percentage drops to 23% for those who are renting.
There is also considerable disparity between the two groups when it comes to home contents insurance, with 73% of home owners financed with mortgages being protected by this type of insurance, compared to the 40% of those who rent accommodation.
The company’s protection director, Louise Colley, said: “When someone takes out a mortgage they are often asked to consider how they might pay it if they were seriously ill or if sadly an income-earner was to die.”
She added: “If a family rents, these conversations may not happen, so there’s a risk that if a renting family loses an income, they may not have the protection that could help to pay the rent and cover the bills.”