More than one in four (27%) insurance customers said they would cut cover or switch to cheaper policies if they were not able to make monthly premium payments, research from Premium Credit has revealed.
Premium Credit’s Insurance Index found two out of five (39%) customers in total would be affected if they could not pay for their insurance on a monthly basis.
Around one in 12 (8%) drivers said they would sell their cars if they could not pay monthly and 2% said they would drive without insurance, while 8% of consumers surveyed would cancel home contents insurance.
The research showed that around one in eight (13%) insurance customers expected to cancel policies which they still need over the next two years as they cannot afford the cover.
Motor, buildings and home contents were the most likely to be cancelled.
Around 11% said they have cancelled polices they need over the past year with home contents and pet insurance topping the list.
Just under a third (29%) of those cancelling policies did so without telling their partners.
Mona Patel, consumer spokesperson at Premium Credit, said: “The ability to pay insurance premiums monthly is highly valued as our research highlights, with customers saying they would cut cover if they could not do this.
“Substantial numbers of customers say they have cancelled policies they needed in the past year and others plan to reduce cover in the years ahead underlining the need for affordable options to fund cover.
“Cancelling insurance cover is a major risk and, in many cases, will be a false economy if consumers have to fund major unexpected bills which they could have claimed for.”
