Drivers are considering reducing their car insurance coverage in order to cut living expenses, according to new research. A survey by Deloitte has revealed that 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 credit crunch is being blamed for the dropping of 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 revealed they would downgrade their level of travel insurance and an additional eight per cent stated that cut backs would be made to pet insurance.
However, David Rush, partner at Deloitte, has urged consumers to think of the long-term impact of not being fully covered by some insurance policies.

"Consumers should think carefully about which types of insurance they most need in a downturn.

"A short-term saving could cost a lot should an accident occur and adequate insurance cover isn't maintained," said Mr Rush.