Consumers risk underinsuringRecession prompts people to cut back on cover
11 May 2009
More consumers are underinsuring in an attempt to limit out-goings during the recession. The British Insurance Brokers' Association (BIBA) has found that more than a fifth of brokers have seen their customers reduce their level of insurance protection in recent months.
BIBA has found that 29% of brokers have seen customers paring back on non-essential cover and add-ons, while 16% of brokers say customers are reducing the sums insured and increasing excesses. A massive 96% of brokers identified buildings and contents insurance and motor insurance as the main types of cover consumers are cutting back on.
Eric Galbraith, BIBA chief executive, said: 'I am concerned that families are putting themselves at financial risk by reducing insurance. Cutting out the wrong part of your insurance protection could be a costly mistake. Professional advice from a brokers on a tailored insurance programme is the only way to achieve a cost effective solution.'
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