Car insurance research for comparison site Quotezone.co.uk has found unemployed drivers pay an average of 30 percent more for cover than someone who is employed. Estimations from the Office for Budget Responsibility (OBR) have found an additional 2.7million people in the UK could be made redundant by the end of the year.
Economic and industry experts have warned of a sharper rise in redundancies which could see a total of four million out of work by Christmas.
Insurance experts have now warned of a “redundancy double whammy” as costs could rise when a driver loses their job.
Greg Wilson, founder of Quitezone.cpo.uk says costs could rise as their unemployed status “is reflected in their risk profile”.
He said: “Unfortunately, the new projections from the OBR indicate that there is still worse to come.
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According to experts at MoneySuperMarket insurers “tend to charge unemployed people more for care insurance”.
The company claims this is because unemployed divers are more likely to make a claim on their policy than someone with a job.
MoneySuperMarket said unemployed drivers are more likely to use their cars which increases the risk of having an accident.
It warns unemployed motorists are more likely to drive on roads they are not familiar with or could become distracted due to their circumstances.
Unemployed drivers may be viewed by insurers as less likely to maintain their vehicles as they have less spare cash.
This could see key car parts easily decay, leading to a higher chance of motorists making a claim against a policy.
Despite the higher costs, Quotezone.co.uk has warned that drivers have a contractual obligation to inform their providers if they lose their job.
Mr Wilson warns failure to disclose the details could result in the policy being invalidated completely.
He said: “However we recommend that people be honest even if it does result in higher premiums.
“Failing to disclose a redundancy to an insurer, risks invalidating the policy entirely – meaning they are not covered when they need it the most.
“Our comparison site is designed to help people see a wide variety of quotes from over 200 car insurance providers, so they can make an informed choice about the policy that suits them, at a competitive price.”
MoneySuperMarket warns money can be knocked off your car insurance premium by accurately describing your current situation.
It said unemployed drivers can save “significant sums” on their policy by simply changing the job title they supply to firms.
Declaring that you are a “housewife”, “mature student” or “retired” if this is accurate will lower your overall costs.