Credit crunch drives down car insurance cover

Tue, 01 Jul 2008

Many car owners are considering reducing their driving insurance coverage in order to cut living expenses, new research has revealed. According to the survey by Deloitte, up to 18 per cent of motorists planned to buy just third party only coverage, which could lead to a drop in revenue of £1.5 billion for the insurance industry.

The current economic uncertainty is being blamed for the reduction in insurance by UK consumers, of which 26 per cent are also planning to refuse payment protection insurance for items they buy. A further 12 per cent claim they would downsize their level of travel insurance and an additional eight per cent stated that they would make cutbacks to pet insurance .

But David Rush, partner at Deloitte, has urged potential insurance customers to consider the long-term impact of not being fully covered by some policies. "Consumers should think carefully about which types of insurance they most need in a downturn," he said. "A short-term saving could cost a lot should an accident occur and adequate insurance cover isn't maintained."
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