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Car insurance premiums rocket 40% for unemployed drivers

Paloma Kubiak
Written By:
Paloma Kubiak

Drivers who face job losses could also be stung with higher car insurance costs – by up to 40% – according to analysis of quotes.

Employment status and working in certain professions can push up premiums by 50%, with ‘key workers’ also being charged more than the average for a car insurance policy.

The research by comparethemarket.com revealed that for someone who is unemployed, they face paying 40% more for car insurance compared to the same policy for an employed person.

When compared to an HGV driver – the cheapest profession for car insurance – the unemployed pay 54% more.

The comparison site analysed quotes for almost 100 professions, based on a 30-year-old man from Bury St Edmunds, driving a Ford Fiesta, only changing job title and industry.

Its research revealed that premiums could be up to £200 more expensive depending on a driver’s job or employment status.

‘Key workers’ also face some of the highest car insurance premiums with a carer paying an average of £431 – 6% higher than the average – while an NHS healthcare assistant was quoted £427 – 5% higher than the average.

Taxi drivers and chefs face the highest car insurance costs, at £485 and £459 respectively.

At the other end of the scale, lorry and bus drivers join HGV drivers in paying the lowest average rates for car insurance (£371.81 and £381.14 respectively), with police officers, engineers and civil servants also being covered for less.

The policies come in at less than the amount paid by retirees, though housewives/househusbands were found to pay £413.88.

‘Increased financial burden for the unemployed’

Dan Hutson, head of motor insurance at comparethemarket.com, said: “Premiums are calculated using a wide range of factors with some being used as a proxy for how likely that driver is to make a claim.

“Each factor has a different level of importance in an overall policy and this research demonstrates just how important a job title or employment status is when getting insurance. Take care that the information you disclose regarding your occupation and throughout the quote is accurate and complete to the best of your knowledge. If you don’t do this, an insurance provider could increase your premium, cancel your policy, treat it as if it never existed, refuse a claim or not pay the claim in full.”

Hutson added that with millions expected to be made unemployed around the UK as a result of the pandemic, they may also face the increased financial burden of higher car insurance costs at a time when they can least afford it.

“If driving is unaffordable for this group, this could have a serious impact on their ability to secure another job, with our research showing that 54% of young drivers saying that not being able to afford to run their car will negatively impact their ability to get a job,” he said.