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Insurance policies being compromised due to credit crunch

May 7, 2009 by admin  
Filed under News, News-Insurance

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There are many different ways in which UK households are trying to cut back on their monthly outgoings in the current , as most people are struggling to make ends meet properly due to their finances.

However, some industry officials are concerned about some of the ways in which households are trying to reduce their outgoings, such as by compromising on their , which could mean that they are not adequately protected.

Recent research has indicated that as a result of the financial strains brought about by the credit crunch, many people have either reduced their insurance cover or in some cases have even cancelled their cover.

With the recession underway households are finding a variety of ways to reduce costs, but industry officials have warned that cancelling or reducing insurance cover may end up costing more than it saves, and have warned consumers to think twice before taking this action.

There are different types of insurance cover that are being affected by this situation, including cover. An official from the said that some people were cancelling or reducing insurance cover at the time when they probably most needed it.

He said: ‘It’s a false economy. Insurance may seem expendable when family budgets are being squeezed, but people should think long and hard about the most sensible places to make savings rather than rashly cancelling essential cover.’

Another official said: ‘If you cancel a policy, it is likely it will cost more to take out the same cover at a later date because the risk increases as you grow older. Any deterioration in your health will also mean premium costs would rise, or even worse you may not be able to get cover. So cancelling a policy can prove a false economy and, of course, leaves you dangerously unprotected.’

Tags: insurance cover, financial climate, home insurance, insurance fraud, different ways, insurance policies, Association of British Insurers, finance

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