Why housing providers have a responsibility to insure their tenants
Like many large housing associations, we have a problem with the number of residents who don't have their own home contents insurance cover.
Research carried out by the Association of British Insurers shows that 70% of residents in social housing don't have any form of home contents insurance, but we estimate this could be as high as 80% among our own residents.
Despite repeated attempts to raise awareness of the importance of insurance, the message often isn't heeded because of the perceived cost associated with it. As a result, we often receive calls, after a resident suffers a flood or a break in, asking us to compensate for the repair.
To overcome this, and to soften the blow of a recent increase in rent, we suggested to our management and residents board that we include free contents insurance in our rent package. They offered their overwhelming support.
When looking at suitable insurers, we focused on finding a deal that offered value for money. Based on insuring 10,000 of our properties we were offered a premium of about £200,000, including a 6% insurance premium tax. After further research with our insurance broker we looked at Groupama to underwrite our home contents insurance policy up to a maximum of £10,000 per home, including full accident cover and a small excess charge for accidental damage.
It was important that we made tenants clear that this policy was not an endless pot of money to be abused. During our initial contact with tenants, sending them a welcome letter, policy document, policy schedule and a key facts document, we pointed out that this scheme had only been guaranteed for a year and that all claims would be independently reviewed by the insurance provider.
The response from our residents has been positive. Several tenants have contacted us to thank us, including one who had previously never been able to afford to insure any of the contents in their home before.
With higher levels of antisocial behaviour around social housing estates and low levels of home contents insurance held in these same areas, the question for housing associations is whether they should they leave residents to learn on their own or try to protect them from the dangers? It's a decision for each provider to take with its board.
Stuart Bishop is head of asset management at Paradigm Housing
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