We are all trying to save some extra pennies at the moment and there are many ways to do so, however, downgrading your car insurance policy is not the way. A recent survey conducted showed that around 18% of motorists are considering purchasing third party only when the time comes to buy or renew their car insurance.

If customers do downgrade then the insurance industry could lose around £1.5 billion in revenues and what happens when companies lose money? They have to increase their prices to help them maintain profits. This means customers would probably see a rise in premiums so customers may not save as much as they think.

The insurance industry on the whole has been hit hard by the credit crunch with 26% of customers refusing to take out protection on any products they buy. Customers are being advised not to downgrade their policies because they will not receive the cover they need and should the unexpected happen, you could be left with huge bills to pay.

Customers looking to save money on their car insurance should consider switching as this is often the best way to cut down on your expenses. If you have not renewed in the past 2 or 3 years then chances are that there will be a better deal available so shop around and see what you can find.

Finding cheap car insurance may not be as easy as it was due to an increase in price of 20% over the last 12 months which has added approximately £100 to premiums. However, shopping online can at least ensure you find the most competitive deals around by comparing the leading providers. Do not downgrade your car insurance policy to save money, there are items you can afford to do without but car insurance is not one of them.

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Article by: moneysupermarket.com