car insurance

Why under employment bumps up insurance costs

by Admin

[Guest Post]

Unemployment in the UK has edged closer to the three million mark, and is at its highest level since 1996. As well as not having a regular source of income, unemployed drivers are more likely to be hit by higher payments for car insurance. Motorists who are out work are being advised to shop around for better deals on websites such as moneysupermarket.

An investigation carried out by the BBC revealed that car owners without a job are, on average, paying around 30% more for their insurance than motorists with full-time jobs, while their premiums are potentially 63% higher. There are a few reasons why unemployed drivers are seen as risky by some insurers.

Peter Harrison, an expert on motor insurance from MoneySupermarket explained why: “This is partly because unemployed people are more likely to use their cars during the day and to drive up and down unfamiliar routes to a job interview. Also, some insurers perceive a drop in financial security as a result of losing a job means someone in that situation is more likely to make a claim, hence the rise in the price of premiums”.

When out of work, your car is vital in helping you find a new job, but the impact of losing income means you might struggle to keep up with payments on credit cards and mortgages, which could hit your credit rating. A poor credit rating could also impact upon the price of car insurance. This is why it pays to look for the best deal possible.

With the help of a price comparison site like MoneySupermarket, you can find a car insurance deal which can save you much-needed cash, but there are other ways to help you keep the cost down at a time when you need to tighten your belt. Getting a new quote could save money, as it could go down every year (£2.4bn is wasted by motorists by accepting renewal quotes). Adding someone with more driving experience to your policy could also drive the cost down.

Reducing your mileage could prove helpful. As well as saving on fuel costs, your insurer could take notice and slash the cost of your policy. Keeping in touch with the insurer about your current circumstances is also a good way to save money. Telling them about losing your job as soon as possible is important, as failing to do so could invalidate your insurance.

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Wednesday, February 22nd, 2012 Economy, Insurance, Jobs No Comments

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