EXCLUSIVE: Contents and Personal Possessions Insurance: Living in the Year 2022

Most personal possessions are invaluable, whether that be in price or in a sentiment we assign ourselves. If we think about the items we go travelling with – laptops, jewellery, musical instruments – losing or damaging them would cause a field of inconvenience, from annoyance to disruption.

In a recent priority report published by AXA UK, which surveyed 2,000 adults, it was found that on average, people undervalue the possessions in their homes, with Gen Z being the lowest at £21,744. With this disparity comes the overall lack of knowledge on contents insurance, respondents admitting that they usually pick the cheapest deal and hope to never need it.

Contents insurance is not mandatory, but you will be made aware of it when taking out buildings insurance, which you need to apply for a mortgage.

Most insurance companies provide contents insurance for homeowners, from big insurers like Admiral, Axa, and Aviva, to newcomers like Urban Jungle, GetSafe, and Coverbaloo. A standard plan will cover up to £75,000 worth of essentials from theft, vandalism, and fire and water damage. A recent survey by Finder UK found that among the 22.6 million homes in the UK, 7.5 million do not have contents insurance, following a further trend in the report of declining home insurance buying. The main reasons people gave for not insuring their contents came down to not being able to afford it and not believing they needed it.

This assumption is fickle when considering the ongoing strife of climate-related disasters and theft costs in the UK. According to the Environment Agency, around 5 million homes in the UK are at risk of being flooded, The Conversation’s analysis found that the £360 million in insurance payouts due to Storm Ciara and Franklin average out to about £32,000 per household claim – that aligns with AXA’s report on the worth of home essentials.

As these threats become more pronounced, buying contents insurance should be more essential to homeowners and renters alike.

There is an even larger discrepancy when looking at private renters and their lack of contents insurance. A survey from Nationwide, saw that just under half (48%) do not have any form of contents insurance, that is around 4.44 million private renters in the UK. A further 19% mistakenly believe that it is the landlord’s responsibility to provide the cover. Renters may be uninformed about contents insurance because of its optional nature, not checking the extent of what it can cover as it is not pushed as a necessity.

“We found through our contents insurance product that 90% of the people who buy it, have never had it before,” said Jimmy Williams, the Co-Founder and CEO of Urban Jungle. “Only 40% of people who rent have any form of contents insurance, and that means from our point of view, when we’re marketing our products, we’re not saying how great we are, we’re actually saying this is a good product to own.”

Urban Jungle has been operating since late 2017 and has built a suite of contents and home-related insurance. Currently, they offer: contents insurance for, in and out the home, building and contents insurance, buildings insurance only, landlords insurance, and tenants liability insurance. The FCA-approved insurer saw that there was a gap in the market for new buyers and renters in the UK, and set out to develop a set of insurance products with a focus on customers with a variation of living situations.

“The idea for Urban Jungle came from some bad personal experiences. When we first moved to London, we were in a flatshare, and because we were sharing a house as four adults, no one would insure us. To get the insurance we had to go old school, to an offline insurance broker. It was a total nightmare when you consider that by then everything was online,” said Williams.

Williams’s story clearly solidifies the image of insurance being too slow to adapt to the needs of the customer. Like homeowners, tenants and renters need contents insurance to protect their valuable personal items – but the similarities stop there.

Williams lays out some of the reasons why renters should be more aware and informed on contents insurance and tenants liability insurance. “If you get a flood or the house burns down, which we will see – we have around 100,000 customers – we’ll see dozens of those in a year. Sometimes your landlord will give alternative accommodations, but mostly not, and you could be out of nowhere to live, and still be paying rent because you’ll be held by your rental agreement.

“We don’t think contents insurance should be compulsory, because it is reasonably expensive if you are low income – our prices start at £5 a month, but the industry standard is £10 a month, not everybody has that much – what we believe is that the government should make the (tenants) liability portion compulsory, like most other countries in the world. And we can provide that for £1-2 a month. That would at least [sic] lower the extreme risk of you becoming bankrupt because your liability is covered.”

Urban Jungle has recently secured £16.5 million in the Series A funding round, excelling rapidly in its goal to make insurance technologically and financially accessible to all.

A key component in their product offering is that policies work on a monthly subscription basis. So when a customer is unable to go on with their plan, they aren’t troubled with missed payment fees or debt. This follows the growing trend of companies – even outside the financial sector – offering usage-based, modular products and services. It is a more reflective approach for people with alternative living arrangements, whether it be a houseshare, uni accommodations, or living with parents.

Ensuring one’s valuables do not have to be tied in with the home is why more products around personal possessions insurance are emerging.

Personal possessions insurance is centred solely on your singular personal items. With policies from AXA and Admiral, it can be purchased as an add-on on top of home or contents insurance, the key difference being that it will ensure items all over the world. So if you lose your luggage at the airport, you have the agency of £1000-20,000 to fall back on.

This type of insurance can go further, as anyone can access it, regardless of their living arrangements or age. Insurtech Arma Karma is doing just this. The company offers monthly insurance subscriptions on any personal items and has a target audience of mainly 18-35-year-olds.

“I’ve been a renter for maybe 15 years now, all this time I’ve lived in part-furnished, furnished, non-furnished, with flatmates, without flatmates, there are so many different combinations., and in all time, working in insurance, I never bought contents insurance, because it never appealed to me,” said Ben Smyth, the Co-Founder and CEO of Arma Karma.

“We established this possession-based insurance as a monthly subscription, it allows renters and non-renters to pick a few items which they actually care about and protect them anywhere you go. […] The way we see possessions insurance is the capability of covering a wide range of items, not just electronics, but jewellery, or obscure musical instrum

Arma Karma’s insurance works in a granular form, making it a lot more flexible than traditional contents insurance, as customers are able to insure select items. This may be essential for students and young people who may not own many possessions but want protection nonetheless. 

The company is based on the campus at the University of Essex and attracts many of its customers through TikTok, which has provided a great learning experience for them, putting them directly into an arena of young people, inexperienced with insurance. “Every day is a school day at Arma Karma, every hour we are learning and making changes. Our whole creation and where we sit today is a result of our customers and the people that we talk to shaping this business. We are the product of our customer’s demands and needs.”

The cost of living will hit young people the hardest and will make the ever-shrinking possibility of homeownership even smaller for people hoping to get on the property ladder. Looking at the solutions provided by insurers like Arma Karma and Urban Jungle shows that customers are becoming more decisive and cautious on what they need to protect. 

Ben Smyth explains, “Increasing amounts of people are going to food banks, younger and younger people are going to food banks, which is terrible. To try and help in some way as a business, we’re a certified b-corp alongside Innocent Smoothie, Ben and Jerries, and Patagonia, some great brands, […] we do have to take into consideration the cost of living increasing, so we are looking to bring pricing down as much as we can, if that means decreasing margins internally, we can do that, it’s just about making things affordable.” 

Affordability is on the mind of every adult living in the UK, homeowner, renter or otherwise, annual policies revolving around a fixed residence are unsustainable for both our present and our future. A report from the Social Market Foundation (SMF) found that. Over 50% (two-thirds of 18–34-year-olds, and 39% of 35–54-year-olds) expect to leave the private rented sector in the next 15 years, a further 69% would be in favour of setting their tenancy agreements at 24 months. Housing in the UK is becoming increasingly impermanent, with more and more people expecting to become lifelong renters. With this trajectory, insurance on personal items should not be seen as an add-on, but as a priority.