An estimated 2.2 million British households will slash or cancel their home insurance policies according to insurer LV=.

Five million Britons hit by the credit crunch are willing to cut cost on home, travel and car insurance over the next 12 months and more than one million said they will trim their insurance cover because it is no longer affordable.

Some 29 per cent of people said they would cancel their flood risk cover, despite the recent bad weather which has forced a rise in number of claims in the past few years at an average cost of £17,000 per claim.

John O’Roarke, managing director of LV= general insurance said: “Home contents insurance is not legally required but anyone who has suffered a flood, or break in will know how important it is to have cover in place.”

Mr O’Roarke added: “as if you do have a problem and you don't have cover, the costs often run into many thousands of pounds.”

“It’s understandable that people are looking to ways in which they reduce their outgoings. “However cancelling or reducing essential insurance cover could result in many people finding themselves seriously out of pocket if something untoward happens.”

He said: “I would just urge those looking to save a few pounds to consider the wider implications of leaving themselves without valuable insurance cover this year, as it is at time likes these, when money is short, that insurance becomes evermore important.”