Consumers are reducing their level of car cover in order to save money during the recession, new research shows.
Many Britons are cutting back on car insurance to save money during the recession - but it could end up costing them in the long run, according to the British Insurance Brokers Association (BIBA).
The organisation surveyed its members to find out how the downturn has affected brokers' business. BIBA discovered that one fifth of brokers surveyed have seen their personal lines customers reduce their level of protection since the onset of the recession.
Respondents to the survey said that the vast majority - 96 percent - of reductions took place in the car insurance or home insurance sectors. Eric Galbraith, BIBA chief executive, urged consumers who are looking to save money on their car insurance to seek advice from a broker first.
"The economic downturn generates an increased focus on cost and brokers should demonstrate the value that they add to clients," he said. "We continue to promote the benefits of brokers and are warning consumers about the dangers of reducing cover without guidance from a broker."
Most reported reductions took place in non-essential cover and "add-ons", with nearly three in ten brokers seeing a reduction in these areas. Others said that consumers were reducing sums and increasing excesses to save money.
