During the earlier stages of the recession, we saw a majority of Brits opting out of life insurance in a bid to cut back on the spending during the financial crisis.
Yet with the economy now worsening, homeowners are choosong to abandon their home insurance cover aswell, for the same reason.
According to the British Insurance Brokers' Association, a number of insurance brokers have reported, that over a fifth of its customers are reducing the level of cover on their home and car insurance policies, with a majority opting out of garden cover and personal possessions altogether.
Eric Galbraith of insurance firm, Biba said: "By choosing to stick to the minimum level of cover required by law, homeowners and motorists are exposing themselves to great financial risk, if they suffer a fire, burglary or have their cars stolen or damaged.”
By cutting back on home insurance, homeowners could be forced to fork out rocketing expenses, should the worst happen.
Research from Sainsbury's Home Insurance revealed that the cost of replacing the average person's contents adds up to nearly £45,000. In the case of a fire or burglary, having minimal insurance could leave you in a worse off situation.
Furthermore, opting for a minimum amount of cover, could prove to be more expensive during the recession as the levels of burglary have been seed to be increasing.
According to crime statistics from a price comparison website, the number of burglaries, taking place across England have increased.
Figures from the same statistic showed that burglaries had increased by four per cent between October and December last year in comparison to the same period in 2007.
The head of home insurance at the website, said: "It's not surprising to see an increase in burglaries; it's one of the more unfortunate and sinister affects of the recession. It is essential that all homeowners, take whatever steps they can to protect themselves.
If homeowners are faced with burglary, having adequate home insurance can ease the burden of the terrible situation."
To avoid losing to the recession, insurers are advising homeowners to ensure that they have adequate home insurance cover on their properties.
A number of insurers are currently offering homeowners cheaper home insurance deals at reduced prices.
Cheap home insurance
Supermarket giant and insurance providers, Tesco and also Sainsbury's, have announced that they have reduced the cost of their home insurance policies after research found that the average contents value is nearly £45,000.
Commenting, Neil Lard, Sainsbury's home insurance manager, said: "It's staggering when you tot up all the contents in your home, just how much it would cost to replace them all should the unthinkable happen."
Tesco Home Insurance is offering a 45 per cent discount online, but for a limited period.
Jim Bruce, head of Tesco home insurance said: "We are aware of the strain on people's finances at the moment. This offer could help reduce one of the necessary living costs."
Sainsbury's Home Insurance is currently offering a 25 per cent discount on its home insurance policies, along with an additional five per cent discount for those who purchase both contents and building insurance cover online.
Mr Lard, concluded: "Quality contents cover doesn't have to be expensive and significant savings can be made if householders shop around."