Consumers placing themselves at risk in recession

Consumers placing themselves at risk in recession

The British Insurance Brokers’ Association (BIBA) has warned consumers to seek professional insurance advice following research that reveals that consumers are reducing their insurance cover as a result of the recession, with home and motor insurance affected the most.

BIBA is concerned that if consumers cut insurance protection without guidance from an insurance broker, homeowners and motorists could be exposed to financial risk if they suffer a fire, burglary or have their car stolen or damaged.

Key findings of the research, to be launched at BIBA’s conference in Manchester on Thursday, include:

More than one fifth (23%) of brokers surveyed have seen their personal lines customers reduce their level of insurance protection during the recession.

Examples of reduction in personal lines cover included:
- 29% of brokers have seen a reduction in non-essential cover and “add-ons” for personal lines business.
- 16% of brokers have seen personal lines clients reducing sums insured
- 16% of brokers have seen personal lines clients increase excesses

When asked which classes of personal lines insurance are most affected, 96% said motor or home.

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 broker on a tailored insurance programme is the only way to achieve a cost effective solution.”

To find an insurance broker, consumers can use the BIBA ‘Find a Broker’ helpline on 0870 950 1790 or www.biba.org.uk

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