Although many people may be looking to reduce their expenditure as the credit crunch takes hold, one firm has urged people not to cancel their home insurance.

Defaqto said current financial conditions may mean many people have to live within their means again.

However, while there are many options people can take to reduce their monthly outgoings, consumers should not sacrifice their home insurance cover.

People should not cancel their insurance "without giving it serious thought", the firm stated.

"Car insurance is required by law, and home insurance is vital to protect your house and belongings," it commented.

Consumers ought to consider using an online aggregator to find the best deals if their insurance is up for renewal, but they need to ensure they know exactly what their chosen policy covers, Defaqto said.

American Express recently reported that home contents insurance was among the financial products a significant number of people were considering cutting in order to save money.

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