With consumers steadying and limiting their budget due to the credit crunch this has had a knock on effect on home insurance. The crisis, which has gradually got worse due to the US Congress refusing to pass a bank rescue plan, has resulted in lenders restricting their consumer requirement needs for card borrowing and loan extending.

Therefore, more customers are using the price of home insurance to justify their purchasing. It has been revealed that people are prioritising price cover protection because of the current recession.

Mike Powell an insurance consultant stated how the crunch is affecting home insurance and home policies: “Although in these financially difficult times, the cost of insurance cover is an important factor, the cover provided must be at the forefront of the consumers mind.”

He furthered by stating that the cheaper option may not always work out to be cheaper in the end: “Finding out that your insurance policy doesn't cover you when you need to claim, could mean that the decision to save a few pounds was the most expensive mistake you could make.”