Many Britons are reducing their level of car insurance cover in order to save money during the recession, new research has shown.

According to a report from the British Insurance Brokers Association, a significant number of drivers in the UK are cutting back on their car insurance as the credit crunch continues its grip, but they could end paying expensive bills that could have been covered by more comprehensive cover, the organisation has warned.

BIBA surveyed its members to see how the recession has affected brokers’ business. One in five brokers reported a reduction in the level of cover that their customers purchased since the recession kicked in. The survey found that 96% of these reductions took place in the car insurance and home insurance sectors.

BIBA chief executive Eric Galbraith urged consumers against reducing the amount of cover on their car insurance without first seeking advice from a broker.

“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.”

30% of brokers saw reductions in non-essential cover and add-ons, whilst others reported that customers were increasing excesses to save money.

This entry was posted on Monday, May 11th, 2009 at 2:50 pm and is filed under Car Insurance, Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.