Is it wise to downgrade your car insurance policy?

In turbulent financial times, it’s no surprise that people cut back on costs that they consider to be non-essential. However, is it wise to downgrade your car insurance policy in order to save a few quid?

Here’s a plot spoiler – we don’t think so.

Third party fire & theft (TPFT) cover will usually bring about cheaper premiums than comprehensive cover. This can seem appealing for those wishing to cut corners. However, downgrading insurance cover in order to economise can be a high-risk strategy. Accidents can and do happen, even to the best drivers – so opting for lesser cover just to save a few pounds could prove costly in the long run.

Before making a decision based only on price, it’s not a bad idea to consider what a comprehensive policy offers that you cannot get with TPFT. The main difference is that a comprehensive policy will cover you for damage to your car. So you get cover for repairs after you’ve had a prang, or you will recover the market value of your car if it’s written off. With a TPFT policy, you have to pay out yourself. Ouch!

There are some circumstances where TPFT might be preferable, such as where the value of the car doesn’t really justify comprehensive cover. However, please carefully consider the lost policy benefits if you’re thinking of opting for TPFT cover on a higher valued car. Or – for that matter – for any car that you could not afford to repair or replace from your own funds.

If you’re really looking to save money on your policy, then shopping around to see who can offer you cover at the right price is more sensible than merely cutting down your level of protection.

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