Mirror: Cutting insurance is a false economy

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Mirror: Cutting insurance is a false economy

Thu 30th Oct 2008

Cutting car, home or life insurance in the credit crunch is a "false economy", it has been stated.

Writing in the Mirror, John Husband explained that while cover is relatively cheap, the things it protects against can be very costly if they happen.

As examples, he said that car breakdown cover can cost as little as £29 a year from the AA, but one breakdown could mean a £100 garage call-out charge.

He also noted the case of a widow who wrote to the newspaper to say her late husband's life insurance had not been kept up, leaving her with a heavy mortgage.

In addition, home contents insurance costs about £70 a year on average, while the average burglary claim is £2,000, or up to £30,000 for flooding.

And Mr Husband stressed that mortgage payment protection is "one of the last things to jettison" as unemployment risks rise.

Pension contributions, if stopped, should be restarted as soon as possible.

Last week, the British Insurance Brokers' Association also advised people to be careful not to cut important protection as a cost-saving measure.

Spokesperson Graeme Trudgill reminded people that mortgage contracts usually require buildings insurance.

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