There are certain protections you can’t afford to lose out on (Picture: Getty Images)

The rising cost of living is forcing many of us to rethink what we spend our money on.

Recent Which? research found more than 18million households are making a financial adjustment – whether cutting back, dipping into savings or selling items – just to cover the cost of essentials.

So, if money is tight, you may have already trimmed the fat on the number of subscriptions you pay for, switched to cheaper deals or haggled with your existing provider on your mobile and broadband and made significant changes to your weekly food shop (if not, head straight to Which?’s new money health check tool to get personalised tips on how to make changes to save money).

But there is a limit on what can go. Some monthly outgoings, like mortgage or rental payments, and domestic bills, simply can’t be avoided.

And it’s important to stress that some insurances fall into this camp too and simply shouldn’t be cancelled to make ends meet as we’ve been hearing.

Buildings and contents insurance are there to protect you if the worse happens (Picture: Getty Images/iStockphoto)

Home and car insurance can cost hundreds of pounds a year, but aren’t luxuries or nice-to-haves: they are extremely important protections should anything untoward happen to your home or vehicle – and in some cases a legal requirement.

Home insurance can broadly be split into two categories: buildings and contents insurance. Buildings insurance covers any structural damage to your property. This includes the walls, windows and roof as well as permanent fixtures such as baths, toilets and kitchens.

Simply put, buildings cover means that if your house burns down you’ll be able to pay for it to be rebuilt. It’s often a condition of taking out a mortgage – and if you rent, your landlord should have it.

Contents insurance covers the cost of replacing your belongings if they are damaged, destroyed or stolen. Typically, these belongings include (but are not limited to) things such as furniture, kitchenware, soft furnishings, electricals and clothes and jewellery.

It’s calculated in three different ways: first, by bedroom, which estimates how much cover you’ll need based on how many bedrooms there are in your home.

Driving without car insurance is actually illegal (Picture: Getty Images)

Second, sum-insured, which requires you to estimate the amount of insurance you’ll need, and third, unlimited sum-insured, which means the policy has no overall limit – though may have limits for specific types of claim or single items.

You can buy contents insurance separately if you rent to protect your possessions or buy ‘combined’ buildings and contents cover if you own a home.

When it comes to car insurance, by law you need it. It not only protects you and your vehicle but also other motorists on the road. And it also provides financial compensation in the event of an injury.

Thinking you can still drive a car and go without it not only puts you and other drivers at risk, but is also illegal.

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We’re all trying to make savings where we can right now. Some insurance policies can be expensive but can be essential to save you money should the worst happen and keep you on the right side of the law.

Which? Money’s rigorous and impartial research analyses hundreds of policies and can help you to choose an insurer that’s right for your budget and your needs.

We’ve also got plenty of free advice on how to cut the cost of car and home insurance and get the right level of cover for your own personal circumstances.

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There are certain protections you can’t afford to lose out on.