Don't scrimp on insurance during the credit crunch
28 October 2008 08:17
Brits have been warned that attempting to save a few pounds on insurance in the short-term could lead to significant longer-term financial implications.
Coming as millions of UK households look to cut back on expenditure in the wake of the global credit crunch, experts have strongly advised that insurance is the last place people should be looking to make savings.
According to recent research carried out by the website uSwitch, some 42 per cent of Britons have cancelled insurance or pensions contributions as a result of the rising cost in living, with car, health and life cover the most likely to be targeted by the penny-pinchers.
Commenting on such an attitude, Graeme Trudgill, technical and corporate affairs executive at the British Insurance Brokers' Association, stated: "There are certain insurances that you shouldn't ditch at all; particularly motor insurance which is required by law.
"The other thing people would normally try to continue in the hard times is the contents insurance. It is all their worldly goods and your house can be burgled, have a fire or a flood as we saw in 150,000 cases last year of floods just in the summer incident."
Despite this advice, a study by American Express found that five per cent of consumers may consider taking a risk and cancelling their motor insurance in the near future.