Sixteen million people have no contents insurance and no savings to replace lost or stolen items, according to a report.
Tenants, young people and social housing residents are all the most likely to not have home insurance, according to the Financial Inclusion Commission.
The cross-body campaigning group said that 60% of people earning £15,000 or less have no contents cover whatsoever, leaving them vulnerable and unable to replace their belongings.
Those on lower incomes were also more at risk of becoming victims of burglary, arson or flooding than the average household because of the location of social housing.
People who live in social housing tend to be unable to afford the most affordable level of cover, which requires an annual lump-sum payment.
This means they’re forced to pay more, meaning they often have no cover at all. A solution could be that tenants are offered insurance automatically with rent.
The report suggested four steps to improve take-up of contents insurance for vulnerable people:
Chair of the FIC, Sir Sherard Cowper-Coles said: “The findings in this report are a reminder of the challenge we face in furthering financial inclusion. For many, insurance is an unaffordable or unobtainable safety net. Government must push for a strategy that widens access to quality cover, so that everyone has immediate access to a capital buffer in case of loss.”
Noel Summerfield, head of Home Insurance at Admiral, said: “This research highlights that the people who need the right insurance the most are often the least likely to have it.
“More and more people are being forced to tighten their belts as disposable household income falls, so it’s understandable that many can’t prioritise insurance.
"But contents insurance could be essential should the worst happen. There are some competitively priced products on the market, so by shopping around it should be possible to find cover even if you have a limited budget.”