Your occupation is one of the things an insurance company will consider when calculating the cost of your car insurance. Research in 2020 found the difference between the cheapest and most expensive policy could be as much as £200.
Professional drivers, chefs, hairdressers, bar staff and fitness instructors were found to pay the most for car insurance. Meanwhile, mechanics, administrators, designers, design engineers and account executives pay the least.
Does an unemployed person pay more for car insurance? Daniel Hutson of Comparethemarket, said: “Unfair as it might seem, the answer is often ‘yes’. Without a job, you may be considered a higher risk by insurance providers. This can hike up costs, come renewal time.”
MoneySuperMarket advises policyholders to avoid telling insurance companies they are unemployed. According to a report in the Guardian, students and retired people who mistakenly describe themselves as ‘unemployed’ could lose up to £700 a year.
Similarly, stay-at-home parents stand to lose out if they tick the ‘unemployed’ box rather than choosing ‘housewife’ or ‘home keeper’.
‘Choose the most accurate answer’
Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “To get the best cover, at the best price, you have to choose the most accurate answer at every stage. That can mean trying alternatives to find the one that best matches your situation, instead of plumping for whatever seems most obvious. It’s worth taking your time.”
The Association of British Insurers (ABI) says unemployed people may travel more because they’re doing more things during the day. There’s also the chance that they’ll spend less money on servicing and maintenance, which could increase the chance of an incident.
This doesn’t mean that you should avoid telling your insurance provider if you lose your job. On the contrary, if you fail to notify your insurer of a change in employment, your policy could be invalidated. An insurance company is within its rights to refuse a claim or offer a reduced settlement figure.
Speaking to Express.co.uk, Greg Wilson, founder of Quote Zone, said: “A driver’s occupation is one of the variables many insurance providers use in their premium calculations. Insurance claims data indicates that people in certain professions have a higher risk of making a claim than others.
“If you’re made redundant you might not be keen to shout about it, but with car insurance for unemployed people costing 30 percent more, on average, if you fail to disclose your redundancy to your insurer there’s a risk that could be viewed as an attempt to mislead.”
Don’t lie, as this could be considered fraud, but consider the options when notifying your insurance company about a change in personal circumstances.
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