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Car Insurers Slammed for Charging Unemployed More

Car Insurers Slammed for Charging Unemployed More Image

Insurers are being slammed for charging higher premiums to the unemployed at a time when employment in the United Kingdom is at its highest level in 16 years since 1996, although there appears to be no such discrimination for those simply taking out extended Car Warranties.

The BBC carried out research with three insurance brokers and found that car insurance premiums cost an average of more than 30% more for those without a job - although in some cases it was as high as a staggering 63% more.  The Association of British Insurers (ABI) claims that statistics show that unemployment is an extra risk for insurers, but that excuse did not fly too well with Martin Lewis from MoneySavingExpert.com, who slammed the extra charges as "scandalous."

Chris Palmer, a Cambridge architect who found himself unemployed after being redundant last year and then saw his car insurer raise his premium by 40% as a result, told the BBC that "It is apparently considered that the unemployed will use their cars more to travel to more locations to seek work" a notion Palmer believes is dubious at best.  "If one is retired, however, the premium remains the same" he notes.  "I would think that retired persons are more likely to run their cars far more for recreational reasons.  It is in any event, outright discrimination against an already disadvantaged section of society."

Martin Lewis notes that the idea that the same person somehow becomes more of a risk once unemployed is absurd.

published: 23/01/2012 14:00:01

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