Downgrading car insurance could create drivers even more problems

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With 37 per cent of motorists thinking about downgrading their car insurance [http://www.quinn-direct.com/car-insurance/young_driver.html] cover to free up some spare money during the global recession, drivers are being warned of the risks of doing so and the punishments they might face.

A misconception is that only taking out third-party insurance will help to cut costs, but Insurance expert Peter Gerrard explained, "If you only opt for third-party cover then not only will you have to pay for damage to your own car, but your premiums will go up as well after the accident. Increasing your excess is also a popular way of cutting your premiums. The savings are significant and can mean a difference of 10 per cent or more in the cost."

He continues, "However, this is far better for those who only use their cars once or two days a week, and not at peak times. It is a false economy for someone who races up and down the motorway every day. And if your car is only worth a small amount in the first place, it makes no sense to have an excess threshold that high."

Finance expert John O'Rourke warned, "It is understandable that people are looking at which in which they can reduce their outgoings. However, cancelling or reducing essential cover could result in many people finding themselves seriously out of pocket if something untoward happens."

Research has revealed that 5 million people are planning to cut back on their home cover and car insurance in 2009 as household budgets are tightened further.

Almost 30 per cent of home and contents policyholders are contemplating removing flood cover from their insurance, despite incidents of extreme weather looking set to increase because of climate change.

Meanwhile 37 per cent of drivers plan to downgrade their cars cover, leaving them at risk of being caught without any insurance at all or incorrect cover. This could see many people facing huge bills, expensive fines, disqualification from driving and seizure of their cars as they are taken away to be crushed. Should they kill someone in an accident whilst not insured, the results do not bear thinking about and a hefty prison sentence is probable.

With police being better armed to deal with tax evaders with new technology advancements in number plate, the risks should be too high and deter people from scaling back their cover and seeking other ways to reduce their monthly expenditure.
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