Motorists are passing up on the insurance altogether in order to save money, one industry association said today.
There is currently a trend in the UK for people to cut back on their car insurance - because they do not think they can afford the cover in the current recession.
This is the main finding of new analysis from the British Insurance Brokers' Association (Biba), released today. The industry group said that cash-strapped drivers now need to work hard to minimise their costs - thereby lessening the likelihood of the financial burden from the car insurance becoming unsustainable.
Biba's comments follow the release of new car insurance premiums from the AA. According to the motoring group and car insurance cover, annual premiums rose in price by over 1.3 percent in January-March - and now average out at just over £750.
The firm said that the increase worried them as it was the first January-March rise noted on its survey for five years. This suggests that steeper increases are on the way later in the year.
Graeme Trudgill, technical and corporate affairs executive at Biba, said: "The important message is to think: 'what are my needs during the year? Do I need foreign use or Courtesy cars? If so, let's get the total price including that.' It might actually be more than you're paying at the moment.
"Also premium instalments, many people like to pay instalments over the 12 months, particularly now with the credit crunch and we can see many firms charging quite a lot extra for instalment charges. Add it up, what are those 12 instalments going to be at the end of the year? What's the bottom line [you will] pay for that premium and what [are you] covered for?"
