Consumers are abandoning non-compulsory motor and home insurance in an effort to cut costs in the recession.

Esure, the insurer, has reported a 10% fall in the take-up of no-claim discount protection in the six months from September to March.

Meanwhile, insurance brokers report more than a fifth of all customers are scaling back their level of home and car cover — for example, limiting motor insurance to compulsory third party and opting not to take out breakdown cover.

About a third are dispensing with “add-ons” such as insurance for personal possessions or garden items, or baggage cover under travel insurance policies, according to to the British Insurance Brokers’ Association.

Eric Galbraith of 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 car stolen or damaged.”

Figures from Esure show a motorist with five years’ no-claim discount — about 70% off the cost of cover — will see the discount fall to 55% if they have made one claim during the year and have not insured the benefit.

Niki Bolton at Esure said: “Ditching additional cover to save a few pounds can be a false economy if the unexpected does happen.”