Rising cost of living fuels underinsurance problem

Sainsbury’s Finance is warning that the rising cost of living, which rose by an average of 4.2% between October and November this year alone, means many people are increasingly finding themselves without insurance.

New research from the bank reveals that at least 21.9 million people have opted out of purchasing at least one or more insurance products and 13% (2.90 million people) said that the main reason for not covering themselves was because they couldn't afford it or deemed it to be too expensive.

Sainsbury’s Finance, which offers a range of quality insurance products at competitive premiums, reveals that a staggering 4.70 million people claim not to have home contents insurance, and 4.28 million people did not take out travel insurance the last time they went on holiday abroad. The situation is even worse with regard to pet and life insurance where 55% of cat and dog owners (11.0 million people) don’t have any cover for their pets, and 28% (8.87 million people) of those married and/or with children under the age of 18 are without life insurance. Very worryingly and also illegally, 1.15 million people admit to driving a car over the past 12 months without motor insurance cover.

Steve Johnson, Head of Insurance,Sainsbury’s Finance said: “Insurance is an absolute must, but our research suggests that millions of people are playing Russian roulette by opting to do without. Those people finding it difficult to afford insurance due to the rising cost in living need to ensure that they shop around for the best cover because this can dramatically reduce price.

"They should also consider buying online because many providers offer an attractive discount for this – in our case between 10% and 20%% depending on the insurance bought. People can also consider spreading the cost of their insurance by paying by direct debit on a monthly basis.”

Despite qualifying for a particular insurance for example homeowners, motorists or pet owners, 39% said that they felt that their respective insurance was not necessary. This was followed by 13% who said they opted out because they just could not afford it or it was too expensive; and 2% who said that they did not have time to purchase it.

From a regional perspective, the South-East (21%) and the North of England (17%) had the largest percentage of people who opted not to purchase a form of insurance product. Londoners were the least likely to cite affordability or the cover being too expensive as a reason for not purchasing, with only 9% giving this as their primary reason for not having cover compared with 19% of people in the South East.

Sainsbury’s offers a range of attractive insurance products including home, motor, life, pet and travel. For further information on Sainsbury’s insurance products, visit sainsburys.co.uk.