One million cut home cover

Sainsbury's Finance has added to reports that people are cutting back on insurance with a survey estimating that nearly one million people have cut back on home insurance.

The survey estimated:

• 946,000 people have either cancelled their home contents insurance or reduced the amount of cover they have in the last 12 months
• 526,000 people are estimated to have reduced the level of home contents cover
• 420,000 have scrapped their contents policies altogether.
• 700,000 people reduced or cancelled their buildings policy in the last 12 months
• 13,000 claims between the end of December and the end of January alone for water-related damage to their properties. The average value of these claims was over £2,000.
• 579,000 people have given up or reduced their car insurance cover
• 450,000 have given up their pet insurance and travel insurance policies respectively.

Neil Laird, Sainsbury's home insurance manager, said: "Given the financial state we're in it's inevitable that people are going to be looking to make cut-backs, but it's a real concern when those cut-backs leave them vulnerable to far greater expense down the line.

"It can be tempting, with some insurance policies, to simply hope for the best. But policies vary a great deal, and cancelling your cover or opting for a cheaper deal that doesn't offer adequate cover could have serious financial consequences when something goes wrong. Insurance should be viewed as a necessity, not a luxury."