Higher Car Insurance Premiums for the Unemployed

[HurryUpAndWait]

http://www.bbc.co.uk/news/uk-16652779

The Association of British Insurers said:

data showed unemployment was an additional risk for insurers.

Martin Lewis of MoneySavingExpert.com said:

charging more was "scandalous".

Here we go again. So people who are statistically more likely to claim (or claim more) are being asked to pay a higher premium in many cases. I see no problem in this whatsoever - it's not the job of insurance companies to act as secondary welfare providers. Reminds me of when the EU banned discrimination on the basis of gender for premium calculations. Madness!

It's not "scandalous" Martin Lewis, it's "expected" and "reasonable" you professionally-offended tool.

[nelly1]

Surely this will just push up the number of unemployed who don't insure their cars anyway?

[sinizter]

That quote is from MSE ... Par for the course.

Don't make the mistake of wandering into the section dedicated to benefits in their forums.

[U T]

Surely if the data shows the unemployed claim more frequently or claim higher amounts, it would be scandalous not to charge them more?

If you don't charge someone who is a higher risk more, then someone else who is a lesser risk must have to pay more than they should, to make up the shortfall?

[LukeBird]

sinizter said:

Don't make the mistake of wandering into the section dedicated to benefits in their forums.

I can't even begin to imagine how bad it must be in there. I think I'd probably end up on a killing spree if I dared to look!

[pacman1]

U T said:

Surely if the data shows the unemployed claim more frequently or claim higher amounts, it would be scandalous not to charge them more?

If you don't charge someone who is a higher risk more, then someone else who is a lesser risk must have to pay more than they should, to make up the shortfall?

So if I lose my job tomorrow, should I tell my insurers my circumstances have changed, as in some weird way, I have become a higher risk overnight? I don't think so.

Conversely, would the premium reduce once I find another job? I think it is very descriminatory and only encourages people to be economical with the truth with their insurers.

How long before they ask, 'have you had any accidents, or been unemployed in the last five years?'

Edited by pacman1 on Saturday 21st January 10:20

[sinizter]

pacman1 said:

So if I lose my job tomorrow, should I tell my insurers my circumstances have changed, as in some weird way, I have become a higher risk overnight? I don't think so.
Conversely, would the premium reduce once I find another job?

Edited by pacman1 on Saturday 21st January 10:16

While you personally might not be a higher risk, the average are, at least that is what the article suggests.

[croyde]

Don't become unemployed, just become Freelance with a lack of work. Oh! hang on us Freelancers get fleeced by the insurance companies as well

[HurryUpAndWait]

pacman1 said:

I think it is very descriminatory and only encourages people to be economical with the truth with their insurers.

So you should lie to your insurers?

Insurance companies need to assess the risks of underwriting a policy. It turns out that there are many factors in determining this risk. Age, gender, locale, experience all contribute. Employment status is another that (according to the ABI) also helps explain claims against policies. It would be idiotic for the insurance companies NOT to include such a factor in its premium calculation. Yes, there are those who see certain of these factors unpalatable, but tough titties. When I was a youngster, my premiums were huge, because on average, my peer group claimed a lot. Annoying to me, absolutely, but not scandalous. It was to be expected, and I accepted it. It was 'fair'. Any insurer not doing their job properly (miscalculating risks) will find that they may attract a disproportionate number of unemployed (or the young, or men, or the inexperienced - all of which have higher average claims), and will be out of business pronto since they are also charging too much for those whose risk is statistically lower - namely the employed, the experienced, the older drivers and ladies.

I don't want to subsidise those who are a higher statistical risk through unemployment, I already do through taxation and funding of the welfare state. Likewise, I don't want to subsidise any higher-risk group, and that includes (I'm led to believe) men - I am one and am against the European legislation banning discrimination on the basis of gender. It's utterly ridiculous.

[Mr_B]

HurryUpAndWait said:

Here we go again. So people who are statistically more likely to claim (or claim more) are being asked to pay a higher premium in many cases. I see no problem in this whatsoever - it's not the job of insurance companies to act as secondary welfare providers. Reminds me of when the EU banned discrimination on the basis of gender for premium calculations. Madness!

It's not "scandalous" Martin Lewis, it's "expected" and "reasonable" you professionally-offended tool.

You need to look a bit further into it than you have, seems you are just as professionally-offended just as much as Mr Lewis.
It would be scandalous if the figures showed a 2% extra risk to insurance companies from the unemployed, yet they were loading it up to 60%.
Without the data, doesn't mean too much.

[HurryUpAndWait]

Mr_B said:

You need to look a bit further into it than you have, seems you are just as professionally-offended just as much as Mr Lewis.
It would be scandalous if the figures showed a 2% extra risk to insurance companies from the unemployed, yet they were loading it up to 60%.
Without the data, doesn't mean too much.

Mr Lewis is professionally-offended since it's his business to be - look at the naughty banks and insurers. Aren't they nasty, etc etc. I admit that I am offended, but not professionally-so.

"According to the Association of British Insurers, any additional risk associated with being out of work is a “quantified factor supported by evidence”."

If I go on to one of the many insurance comparison websites, the quotes for me vary by a huge amount. It's a market, and as such, some insurers are pricing themselves out of wanting to insure me. If the risk really was an additional 2%, then as a free market in insurance, they'd be presumably some insurers willing to forgo the additional risk. This isn't what's being seen, so I suggest the risk is substantially higher than this.

Though I agree further data would be useful in determining what the justifiable premium increase is, my point is simply that one shouldn't stomp up and down crying "it's unfair" when statistically they are in a higher risk group.

[98elise]

sinizter said:

pacman1 said:

So if I lose my job tomorrow, should I tell my insurers my circumstances have changed, as in some weird way, I have become a higher risk overnight? I don't think so.
Conversely, would the premium reduce once I find another job?

Edited by pacman1 on Saturday 21st January 10:16

While you personally might not be a higher risk, the average are, at least that is what the article suggests.

You would be a higher risk. I'm unemployed at the moment and I'm out and about in the car most days. When I was in work it spent a great deal of the day parked.

Insurers will have found that unemployed people are more likely to claim, so will adjust that groups premiums to match. Its just how insurance works.

[HurryUpAndWait]

98elise said:

sinizter said:

pacman1 said:

So if I lose my job tomorrow, should I tell my insurers my circumstances have changed, as in some weird way, I have become a higher risk overnight? I don't think so.
Conversely, would the premium reduce once I find another job?

Edited by pacman1 on Saturday 21st January 10:16

While you personally might not be a higher risk, the average are, at least that is what the article suggests.

You would be a higher risk. I'm unemployed at the moment and I'm out and about in the car most days. When I was in work it spent a great deal of the day parked.

Insurers will have found that unemployed people are more likely to claim, so will adjust that groups premiums to match. Its just how insurance works.

[EDLT]

Putting my occupation as unemployed has put my premium up in the past anyway, so I'm a temporary worker these days.

[croyde]

Coming close to being unemployed has made me use the car less and less. I just can't afford to use it for fun anymore, although I have just got my hands dirty for the first time in years and have sorted a power steering problem that I normally would have let the garage fix.

That's at least £150 saved and I would have had to earn £250 before tax to pay for it so I'm quids in

[SpeedMattersNot]

Surely if you select 'unemployed' you can then legally insure your car as social and domestic use only?

I added my partner to my insurance and it took over £150 off the annual amount.

Not that I'd even let her drive the thing anyway!

[pacman1]

HurryUpAndWait said:

So you should lie to your insurers?

I did not suggest that. I said it encourages people to be economical with the truth.

HurryUpAndWait said:

Likewise, I don't want to subsidise any higher-risk group, and that includes (I'm led to believe) men - I am one and am against the European legislation banning discrimination on the basis of gender. It's utterly ridiculous.

You can't have your statistics both ways, my friend. If it is by the same analysis proven that men are more likely to claim than women, then as you say, tough titty.

[HurryUpAndWait]

pacman1 said:

HurryUpAndWait said:

So you should lie to your insurers?

I did not suggest that. I said it encourages people to be economical with the truth.

HurryUpAndWait said:

Likewise, I don't want to subsidise any higher-risk group, and that includes (I'm led to believe) men - I am one and am against the European legislation banning discrimination on the basis of gender. It's utterly ridiculous.

You can't have your statistics both ways, my friend. If it is by the same analysis proven that men are more likely to claim than women, then as you say, tough titty.

I'm being consistent and pointing out that I'm against the banning of discrimination on the basis of gender... Read it again.

Edited by HurryUpAndWait on Saturday 21st January 15:53

[U T]

Becoming unemployed means suddenly you have less money. Thus more likely to put in a fraudulent claim, or skimp on servicing or those tyres that you should be replacing.

I can fully understand why the stats show unemployed people claim more or more often. That's not to say that applies to all unemployed people, and of course many employed people skimp on servicing or make fraudulent claims. But on average, that must be more prevelent amongst the unemployed.

Bottom line...that stats show the unemployed are a worse risk. End of story. Insurance premiums are not based on spite.

[Murph7355]

I have no issue with insurers charging more for those at greater risk. And I can understand how the unemployed may be a higher risk.

However. As insurance is a legal requirement I'd like to see more transparency over what is loading the premium for any given quote, AND that the statistics being used are bonafide.

Quite often these days I cannot help but think that insurers just make it up as they go along - OK for optional insurers. Not OK for legal requirements.