Insurers are pushing innovative policies to plug a £1 billion black hole in lost premiums, offering everything from car depreciation to maintenance payments if a former spouse dies, as consumers try to protect their income in hard times.

This comes as many traditional forms of cover are being dropped. Research by Deloitte, the professional services firm, found 17% of consumers were planning not to renew policies like home contents, payment protection, health and pet cover.

James Rakow at Deloitte said: “It is unsurprising that insurers react to loss of revenue by highlighting alternative products.”

Here we assess five policies for tough times.

1. Depreciation insurance

If your car is stolen, insurers only pay out its value at the time of theft rather than the purchase.

Vehicles can lose about 60% of their original value after three years, according to confused.com, the comparison firm, which earlier this month launched a “gap cover” policy which will pay out any shortfall between the value of the car when it was purchased and when it was stolen.

Premiums are calculated using the value of the vehicle and the length of the cover required. A Mini worth £12,000 could be insured for three years for £128 a year.

However, used-car values are, in some cases, going up due to an increase in demand, according to Eurotax Glass’s, a car buyer’s guide.

2. Confidential cover

Totally Insured Group said sales of maintenance payment insurance, which pays out in the event of a former spouse’s death, has doubled in the past 12 months.

The insurance costs about £30 a month to cover payments of up to £2,000 a month, from a man aged 40 who does not smoke. Premiums can vary depending on health factors.

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