Recent studies have shown that a significant number of Brits are cutting back on vital financial products such as car insurance, a worrying trend which could leave many in a vulnerable position.
The report by American Express suggested that 48% of respondents are cutting back on spending when it comes to important services including health insurance in order to save money. But the situation has not been made any easier as fresh revelations suggested that UK drivers were unknowingly paying an annual sum of £500 million in excess to cover those driving without insurance.
Many motorists are now questioning why they should be forced to pay for those driving illegally although insurance providers have been quick to point out the relationship between additional cost and the risk factor involved with many insurers saying that there is a likelihood of more drivers having to claim off their own insurance if the other party is uninsured.
However, a significant number of motorists in urban areas are reportedly considering cancelling their car insurance while still driving on UK roads mainly because the maximum fine for drivers caught without insurance is £250. In recent months, insurance has been saturated with eco-friendly car insurance deals which many motorists believe to be cheaper, but according to findings by a consumer website, it costs 105% more than regular car insurance.
Green car drivers have been credited for being environmentally friendly because of their decision to go green and according to claims, they could be left with extra cash to spare. Industry sources however, say that going green may not necessarily offer the financial incentives you can enjoy if a motorist chooses to drive a more fuel efficient vehicle. A good example is the quotes for the Honda Civic Hybrid which starts from just £342 with Swiftcover, to £389 with CIS (the cheapest green car insurers in the market) and a whopping £701 from Green Insurance.
But according to the American Express study, 24% will skimp on travel insurance even when they are searching for a holiday while 5% said they would stop paying monthly installments for home or car insurance policies. The current economic turmoil also means that life is increasingly looking expensive but the concern among industry experts is that this style of budgeting will most certainly leave the 48% of Brits who are cutting back on the policies very vulnerable.
At the same time, statistics show that drivers are not spared higher premiums in high crime areas and according to figures, motorists in Wales are ranked sixth out of ten worst areas for insurance evasion. Perhaps what is even more alarming is the disclosure by Motor Insurance Bureau (MIB) who claimed that over 350,000 uninsured vehicles have been taken off the road and 40% of them crushed or disposed of.
Additionally, the government and insurance industry will soon be announcing the timetable for the introduction of Continuous Insurance Enforcement in the coming months after a study showed that that there are currently around two million uninsured vehicles on the UK's roads.
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