Sunday 27 November 2022 02:11 AM Could ditching your breakdown cover save you a fortune - or put you on a road ... trends now
Millions of us are turning to ‘self-insurance’ to reduce outgoings in the cost-of-living crisis.
Instead of paying premiums for certain types of cover – typically breakdown, pet and dental – money is put aside each month to build up funds to cover any incident costs.
One in ten insurance-holders have cancelled cover this year to save for increased living expenses. A similar number have kept policies but reduced cover, consumer champion Which? found.
It shows that concerns expressed by the Financial Conduct Authority this autumn have already become a reality. The watchdog said consumers may cut back on cover due to rising bills and asked insurers to protect customers from unnecessary add-ons and unfair penalties.
Just over half of those who pay breakdown premiums have claimed in the last decade
British consumers are cancelling their insurance plans as the cost of living rises elsewhere
There is huge potential value in protection. Without cover, you’re making a bet you might not be able to afford to lose.
Your house is very unlikely to burn to the ground – but if it happened, the cost of rebuilding and replacing the building and possessions could spiral into hundreds of thousands of pounds.
However, for other types of insurance, increasing numbers of Britons, through choice or necessity, are deciding to self-insure.
To do it properly, regular deposits are made into a savings account and the funds used to pay for incidents you would otherwise have claimed for.
Which? calculated when the tactic can save money and when it’s a risky false economy.
Sam
