A million of us downgrade to third party cover

As the recession bites, we are constantly looking for ways of reducing our outgoings and, given the high costs of running a car, it is no surprise that this is an area which many of us are looking at to make savings.

According to recent research by uSwitch.com, more than a million of us have reduced the level of our motor insurance from fully comprehensive to third party, fire and theft.

Many of us are simply no longer able to afford a comprehensive policy whilst others are prepared to take the risk and make the compromise which a third-party policy entails. 3% of motorists using a price-comparison website say they do not even bother to look at the cost of comprehensive cover.

It is, however, slightly worrying that of the 5 million drivers who have third-party cover, over a third admit that they do not know what they are covered for. Of those who think they do understand, many are wrong. 1.8 million people believe that if they had an accident where they were to blame, they would be covered for damage to their own vehicle. What's more, a further 1.8 million think that they would be covered for damage to both their own vehicle and the other party’s vehicle.

It may come as a surprise to some drivers to learn that a fully-comprehensive policy is actually only 11% more expensive on average than a third-party policy, and in the case of young drivers this is even less, with the differential only being 7%. Direct Line in fact charges 6% more for a third-party policy than a fully-comprehensive one for drivers aged 18.

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