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Motor insurance is "essential"

27/06/08

Consumers who are looking to relieve their finances could assess the necessity of many of their insurance polices but not their car insurance, asserts one exert.

Along with home insurance, car insurance is a vital policy, advises Dabid Kuo, head of Fool.co.uk, adding that vehicle owners should question whether they can "afford to bear the risk" of downgrading their policy to third party cover.

"If you buy insurance you don't need then you are wasting money. But if you don't buy insurance that you do need, then eventually your decision will come back to haunt you," he adds.

Mr Kuo's comments follow research conducted by YouGov on behalf of Deloitte which highlighted that in the face of the credit crunch many consumers are looking to cut down their spending on insurance.

Some 26 per cent of individuals who buy insurance from a price comparison site are looking to reduce their insurance spending, the report asserted, with 18 per cent saying they would revert to third party motor cover.

However, 40 per cent of respondents said they would be being cautious and not making any cuts to their insurance policies.

Mr Kuo also notes that the credit crunch is the ideal time to cut down on some polices but stresses that motor insurance is not one of those that can be discarded, stating that it is "essential".

In related news, recent Department for Transport figures show that the number of motorists using UK roads without adequate car insurance rose between 2006 and 2007.

According to the statistics, the number of illegal road users grew from 3.6 per cent of all drivers in 2006 to five per cent the following year.

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