With unemployment at its highest level for sixteen years, insurers are being criticised for charging out of work drivers more for their car insurance. Research carried out by the BBC reveals that insurance premiums are an average 30% higher for unemployed people, but in some cases premiums were up to as much as 63% higher.
The ABI (Association of British Insurers) feel that the results of the research prove that unemployment was an additional risk for insurers. The BBC spent time speaking to a car insurance brokers asking them to work out a car insurance quote for an office worker who, in the first instance, was employed, and in the second was unemployed. The deals offered by the brokers all gave more or less the same price for a working driver; however, the price was between 23% and 63% higher for the unemployed driver.
Unemployed architect Chris Palmer said: “It is apparently considered that an unemployed person will use their vehicle more to travel to more locations to seek work. But if a driver is retired the premium will remain the same. I would think that a retired person is more likely to run their cars far more for recreational reasons; it is in any event, outright discrimination against an already disadvantaged section of society.”
The Association of British Insurers claim employment status is just one of many factors used by insurance companies to set premiums and these include being part-time employed, full-time employed or unemployed. Many insurers feel that there is an additional risk associated with being unemployed and even though this can cause difficulties for drivers, it is a quantified factor supported by evidence. The ABI are advising out of work drivers to shop around and think of other ways they can reduce their premiums, such as keeping mileage down to a minimum.