?Unemployed drivers pay more for their car insurance?

Although car insurance prices are falling for the majority of drivers, those who are unemployed are being charged up to 63 per cent more for their policies.

Many drivers are currently enjoying the falling cost of car insurance, however, those who are unemployed are being asked to pay more, according to research from MoneySuperMarket.

The new survey reveals that motorists unlucky enough to be without a job pay approximately £227 a year more than those in employment. This means they are paying around 58 per cent more to insure their vehicles.

Kevin Pratt, car insurance expert at MoneySuperMarket, said: “Many of the reasons for unemployed drivers being classified more ‘at risk’ are contentious, but there is no escaping the fact that car insurance is much more expensive for the unemployed. 

“Employment status is one factor insurers use to calculate car insurance premiums, as well as others including age of the driver, location, type of car, and driving history.”

As car insurance is one of the legal requirements that need to be met before a vehicle can be out on the road, Mr Pratt believes unemployed drivers could be priced out of driving their cars.

“It is easy to see how this can become a vicious cycle of not having a car to help find and get work because they don’t have an income to be able to afford to drive it. It could also be a huge barrier for those seeking employment,” he added.

The analysis revealed that unemployed drivers could be paying up to 63 per cent more for their car insurance, compared to their employed counterparts. This means that they should be searching for the best deal they can find as soon as their renewal offer hits the doormat. Offers aimed at new customers are generally more attractive than those offered to existing business. 

Before trying to reduce the premium by increasing the excess, check for any compulsory charges that would be payable in the event of an accident. Although increasing the excess will knock a few quid off the cost, it also means more will be expected to repair the car. 

Unemployed drivers need to be honest with their providers, providing any false details when setting up an insurance policy could be the company refuses to pay out after an accident if they find a driver has been less than straight about their circumstances.

  • On: 28 April 2014
  • By: CarShop

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