Is the Credit Crunch Causing a Car Insurance Crisis?

The ongoing credit crunch crisis has meant that many people in the UK are cutting back on their spending resulting in a reduced number of people taking out car insurance. Also the AA have released insurance figures stating that car insurance quotes have risen by 3.5% , which has been the fastest reported rise in car insurance quotes for ten years - adding extra stress for motorists during the recession.

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Drivers in the UK may face increased risks during the recession as many are tempted to hit the roads when tired. 10% of car insurance claims are due to accidents caused by driver fatigue and suggests that a recession-driven overtime culture may increase this risk.

With the credit crunch affecting more and more people, consumers are being forced to cut back on their expenses to save money. It has been reported that a lot of people are reducing the amount of money they spend on optional financial products such as car insurance to try and counteract the rising cost of living. Car insurance is a legal requirement, something which might be a financial frustration for some. There are, however, ways to cut down the costs and find cheap car insurance that is right for you.

Price comparison websites are a great tool for getting a list of insurance policies that will suit your needs within seconds. Once you have found a policy, it is a good idea to look around every two years to make sure you have the cheapest deal on the market.

A recent report warned that British drivers who choose not to take out car insurance in order to save money are foolhardy. It was also highlighted that driving without car insurance was against the UK laws adding that those found guilty running the risk of a criminal record while those who do not take out cover cost their honest counterparts extra money.

Some drivers might be quite blasé about minor driving offences, such as speeding tickets. However you should consider that as soon as you get any penalty points your insurance will rise and stay that way until the points expire three years later. It is estimated that insurers make an extra £375 million each year just from charging extra to those with points.

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Price comparison websites have stated that motorists run the risk of wasting more that £140 each or £9.4bn collectively, by sticking with their existing insurer and not shopping around for car insurance.

A surprising 20% of drivers automatically renew their car insurance with their existing provider rather than shopping around to find a better deal, which during the current recession could be valuable in order to cut down your costs.

There are a number of ways in which you can help to reduce the price you pay for your car insurance such as switching the type of policy you have. Results shows that 5% of motorists would switch to third-party only cover to save money, despite the financial pressures of the recession. Research also highlighted that 13% said they would attempt to reduce their premiums by either raising their excess or reducing the total amount of value insured.

Research has found drivers could save themselves £141 on average by scouring the market - or using car insurance brokers like Be Wiser Insurance who try and take the hassle out of hunting down low-cost car insurance.