Unemployed? Too bad, here’s your rate hike.

Insurers are adding insult to injury to jobless individuals in the UK, raising their car insurance rates by as much as 400 per cent – or even sometimes more, it was recently revealed.

New research found that many car insurance companies will routinely raise policyholder rates when informed about a job loss. Some insurers, such as Sheila’s Wheels, Allianz, and Esure, right out decline to offer insurance to the unemployed.

Insurers say this is because those without jobs may not have the financial wherewithal to keep up on regular maintenance and service for their vehicles or that they will default on payments. It’s also more likely that unemployed drivers may engage in insurance fraud, according to insurers.

Allianz representative, Mark Bishop, said that the insurer will continue to offer cover to existing policyholders who lose their jobs. However, Allianz declines to offer cover to new customers that have no gainful employment, Mr Bishop added.

Meanwhile, one of the most important tools in the arsenal for an unemployed person is their ability to get to job interviews through the use of their car. Making it more expensive to keep a car, in the event of a job loss, therefore makes it even harder to find a new position at a new company, employment experts say, adding that the insurance industry is not doing the economy any favours by increasing the difficulty for the unemployed to get back to work.

Biba’s Leighann Forsyth commented on the research findings, stating that the insurance industry follows ‘the path of least resistance’ when it comes to classifying their customers, lumping everyone together in the same pile.

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