89% of 'Profreshionals' are underinsured and couldn't replace all their belongings if they were lost in a fire or flood.
01 May 2013
- 'Profreshionals' - 18-27 year olds in work are those most likely to be making a fresh start in life, by starting a new job and moving into new accommodation.
- Nearly two thirds, (63%) of 'Profreshionals' could only replace less than a quarter of their belongings immediately
- Over two fifths, (43%) of 'Profreshionals' are concerned about their job security, but only 3% said that they have short term income protection
Despite 80% of 'Profreshionals' claiming to be financially independent*, it appears that the majority are leaving themselves underinsured should they suffer a fire or a flood, according to new research conducted by Legal & General's general insurance business.
The new research** surveyed over 1,000 working 18-27 year olds, as well as close to 1,000 parents with children who meet the 'Profreshionals' criteria.
Almost nine in ten, (89%) of young 'Professionals' admitted that they couldn't replace all of their belongings if they were to suffer a fire or a flood, even after receiving an insurance claim payment. Nearly two thirds, (63%) of 'Profreshionals' said that they could only replace less than a quarter of their total belongings and just over one in five, (22%) said that they could replace half of their belongings immediately. This is despite nearly a third of 'Profreshionals', (31%) saying that they have home contents cover in place.
'Profreshionals' aren't just putting themselves at risk of underinsurance. Over two fifths, (43%) said that they are currently concerned about their job security, but only 3% said that they have short term income protection cover in place. The parents of 'Profreshionals' are also worried with more than two fifths, (43%) admitting they worry that their children do not have enough savings to support themselves if they should lose their job. Almost half, (48%) said it is important that their children have income protection in place.
Despite 'Profreshionals' lack of short-term income protection, they do have other insurance policies in place. Over half, (52%) of those surveyed said they had car insurance and almost a third, (30%) have insurance cover for their mobile phone. But worryingly, nearly half, (44%) said that they feel stressed about managing their finances and over a quarter, (27%) said that once they had paid for essential living costs they are not able to afford to save any money.
These financial pressures are maybe why so many risk being underinsured (89%), or just don't have any insurance cover in place, (20%).
Table showing the proportion of belongings that 'Profreshionals' could afford to replace once they received an insurance claim payment
|% of belongings||0||5||10||15||20||25||30||35||40||45||50||55||60||65||70||75||80||85||90||95||100|
|% of respondents||14||3||4||3||4||4||5||3||4||3||13||2||4||2||6||4||5||2||3||1||11|
Mark Holweger, Director for Legal & General's general insurance business said: "It's great to see today's young 'Profreshionals' achieving financial independence in such a difficult economic backdrop. It's important to enjoy the upsides of starting working life and earning money for the first time but it's also important to understand the benefit of having adequate insurance cover in place. Our research found that only 22% of 'Profreshionals' could afford to replace half their belongings immediately if they experienced a fire or flood. That is despite seven in ten, (70%) of the parents we surveyed saying that they had said to their children that it was important that they have contents insurance cover in place. It is great that two thirds of 'Profreshionals', (66%) said that they discussed their finances with their family, but as a responsible insurer, it is important to flag that more professional help may be required.
We believe intermediaries have an important role in helping this group, who are just taking on key financial responsibilities for often the first time, to appreciate the value of having adequate insurance cover in place to protect the things that are important to them. The checklist we've prepared that outlines some of the key financial aspects that they should consider when starting a new job and/or moving into new accommodati