Rise in car insurance cost-cutting

Comprehensive car insurance is increasingly being shunned in favour of cheaper third party, fire and theft policies as motorists seek new ways of cutting costs, it has been revealed.

Over the past year the number of drivers cutting back on their cover when it comes to renewal time has risen by 10%, insurance company Swinton said.

The recession and the increase in the number of people buying second-hand cars with a value of less than £5,000 have been blamed for the switch, but the company warned that downgrading a policy could be a false economy in the long run.

Steve Chelton, Swinton’s insurer development manager, said: "There is a common misconception among motorists that choosing a policy which offers reduced cover will be significantly cheaper than a comprehensive policy."

"While reducing cover may offer a minimal saving short-term, it could cost drivers a lot more down the line if they are involved in an accident that is their fault."

Mr Chelton’s advice to motorists considering downgrading their policy was to seek their broker’s advice to make sure they fully understand the implications of reducing their indemnity to third party, fire and theft.

Copyright © Press Association 2009

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