Customers are being forced to withdraw car and home insurance offers to save money – but saving tens of pounds could cost you thousands
- The rising cost of living is pushing policyholders to reduce their insurance
- But that gamble risks leaving Britons with massive bills if they have to claim
Consumers are increasingly being forced to cut optional insurance to save money – but they risk paying bills of hundreds or even thousands of pounds if the worst happens.
The UK’s biggest general insurer, Aviva, said Britons were scrapping non-essential parts of their home and car insurance policies, such as windscreen cover.
When purchasing auto and home insurance, customers can choose to purchase additional top-up insurance – for an additional fee. These agreements cover things that the main policy does not cover.
Sometimes these add-ons are included as standard with the price you pay for the policy, as a sweetener by the insurer.
But reducing the level of insurance cover you buy means taking on more risk and facing the possibility of huge bills if things go wrong.
Supplemental coverage: Supplemental insurance policies provide additional coverage for your home and car, but consumers feel they have no choice but to cut back due to the cost of living crisis .
Comparethemarket director Alex Hasty said: “What might seem like a cheaper option could end up costing you more in the long run, if you need to claim.”
Here are some of the most common optional insurance policies and how much they cost you to have – or not have.
Where possible, we have also included figures from the regulator the Financial Conduct Authority which show how many claims are made on trades and how many claims are paid.
However, there may also be a deductible to pay with additional insurance, so check policy details before buying.
Some of these top-ups, such as legal expense coverage for home insurance, are claimed infrequently – once every 312 years, while the same coverage for car insurance is claimed once every 100 years.
However, these offers are inexpensive and pay off 56% and 95% of the time, respectively, making them solid options for risk-averse people.
CAR INSURANCE
Legal cover (before the event)
Premium cost: £15 – £30
Cost of covering the risk yourself: Potentially almost unlimited
Insured persons who claim per year: 0.5%
Percentage of claims paid: 95%
personal injury
Premium cost: £20 – £30
Cost of covering the risk yourself: Potentially almost unlimited
Insured persons who claim per year: 0.08%
Percentage of claims settled: 96.57%
Breakdown cover
Premium cost: £15 – £70
Cost of covering the risk yourself: £50 to hundreds of pounds
Insured persons who claim per year: 6.69%
Percentage of claims settled: 93.3%
Car cover: Skimping on extras such as legal or bodily injury insurance could cost drivers dearly if an accident occurs
windshield cover
Premium cost: £20 – £50
Cost of covering the risk yourself: £130 to £600
Insured who claim per year: No figures available
Percentage of claims paid: No figures available
HOME INSURANCE
Legal cover (before the event)
Premium cost: £18 to £30
Cost of covering the risk yourself: Potentially almost unlimited
Insured persons who claim per year: 0.16%
Percentage of claims settled: 56%
Home emergency coverage
Premium cost: £21 to £60
Cost of covering the risk yourself: Potentially thousands
Insured persons who claim per year: 2.36%
Percentage of claims settled: 86.89%
Compare home, auto and travel insurance
Beat the renewal blues and compare the best home, auto and travel insurance deals.
Each year, those bills can add up, and the best way to save is to shop around to make sure your loyalty isn’t costing you anything.
Results and prices may be similar on most comparison sites, but they may differ slightly, so it’s worth checking a few out. We suggest:
HOME INSURANCE
Before you begin, you’ll need to know the cost of rebuilding your home for buildings insurance, as well as details of any previous claims. For content, you need to know the lump sum to be insured and any high value or special items.
MoneySupermarket
Compare cheap home insurance from 60 brands
confused.com
Get a quote in less than 8 minutes
GoCompare
£250 free excess cover, conditions apply
Switch
See what you could save on your home insurance
Also check insurers such as Direct Line and Aviva that don’t appear on comparison sites.
CAR INSURANCE
New rules from the Financial Conduct Authority aim to prevent insurers from raising renewal quotes, but it still makes sense to look for better deals on comparison sites. We suggest:
MoneySupermarket
confused.com
GoCompare
Switch
Plus Direct Line and Aviva that don’t appear on comparison sites.
TRAVEL INSURANCE
He is a foolish traveler who leaves without insurance, even if it only covers medical emergencies. Compare before buying with:
MoneySupermarket
Compare offers from 35 leading providers
confused.com
See how much you can save from a few days to an annual policy
Also try Direct Line which does not appear on comparison sites and if you have ever had serious medical problems consider a specialist insurer or broker.
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