According to a new report by a leading British car insurance company nearly five million drivers are considering cutting back on their insurance because of the credit crunch.
Insurer LV= noted that car insurance cover was second on people’s list of outgoing costs that households would be seeking to reduce to help make ends meet but this is a risky move which could well leave you seriously out of pocket should anything go wrong.
According to LV= many are tempted to cut back from fully comprehensive insurance to the cheaper and inferior third party insurance option. While of course this may save drivers a small amount of money each month the potential coasts if you are involved in an accident could be huge and would greatly outweigh any small savings.
“It’s understandable that people are looking at ways in which they can reduce their outgoings, cancelling or reducing essential cover could result in many people finding themselves seriously out of pocket if something untoward happens.” Said John O’Roarke from the insurer.
Falling costs for premiums in 2009
The temptation to scale back on your insurance cover for short term savings is not only risky in the event of an accident but could also be totally unnecessary after new research from Sainsbury’s insurance suggested that insurance premiums may well actually be falling.
Despite many predictions of increasing car insurance costs in the wake of the credit crunch, the data collected by Sainsbury show premiums have actually dropped by an average of nearly £20 a year.
The figures collected by Sainsbury’s show that car insurance premiums fell from £514.16 in June 2008 to £498.22 in December. A spokeswoman for the company issued a word of warning though about the potential for rises later on in the year and the need to shop around for the best deals.
The average motorist is still looking at around £500 to insure their car so it is important for them to shop around for competitive insurance. However, motorists should be aware that paying a lower premium does not mean they have to forfeit good cover - by shopping around you can find both. Just make sure that when comparing car insurance policies, you do so on a like-for-like basis.” Said Joanne Mallon from the insurer.
So it seems that the false economy of skimping on insurance may not even be necessary with these premium reductions and that taking the time to research all the deals out there at a price comparison site could well even save you a considerable amount of money with no reduction in the quality of cover.
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