Recession ravaged consumers cut home and motor cover

by Gill Montia

Story link: Recession ravaged consumers cut home and motor cover

The British Insurance Brokers’ Association (BIBA) has published new research showing that consumers are reducing insurance cover as a result of the recession, with home and motor insurance taking the brunt.

In a survey of its members, the body found 23% of respondents had seen their personal lines customers reduce their level of insurance protection since the onset of the recession.

Twenty-nine per cent of those questioned noted a reduction in non-essential cover and “add-ons” for personal lines business, while 16% observed that personal lines clients had been reducing sums insured. The same proportion were aware of clients increasing excesses.

When asked which classes of personal lines insurance are most affected, 96% of brokers surveyed named “motor” or “home”.

BIBA Chief Executive, Eric Galbraith, is concerned that families are putting themselves at financial risk and warns that costly mistakes can be made by cutting cover.

He recommends getting professional advice from a broker on a “tailored insurance programme” to achieve a cost effective solution.

Earlier this week, BIBA reported that more than half of its members have seen commercial customers reduce their level of insurance protection during the economic downturn, with cuts most commonly being made in commercial combined and commercial liability cover.