With the UK unemployment rate at its highest peak in more than fifteen years, car insurance companies have recently been criticised for charging jobless Brits higher car insurance rates than those who are still employed, experts say.
A selection of three car insurance brokers recently spoke to the BBC, revealing through their research that insurance prices for those out of work were 30 per cent higher on average than they are for those who hold down a job. Some insurers charge as much as 63 per cent more for the dubious honour of being unemployed, the research findings also found.
Financial experts have come down hard on the insurance industry, with many calling such practices ‘scndalous.’ Unemployment increases risk for insurance providers, according to the Association of British Insurers when asked to justify the extra charges.
Three broking firms were asked by the BBC to work out premiums for a fictional office worker as part of the research in order to see the differences between employment and unemployment with everything else being equal. The three brokers all reported increased premium prices for the unemployed office worker, with increases ranging from 23 per cent to as high as 63 per cent, with the average falling at about 30 per cent when taking a wider sample range into account with varying employment histories and different postcode areas.
Insurers apparently feel that Brits dealing with jobs losses will end up using their cars more in order to seek out work, according to Chris Palmer, an unemployed architect from Cambridge. Mr Palmer’s insurance increased by 40 per cent after informing his insurer that his work circumstances had changed this past November.