declaring occupation on car insurance

darz456

Hi i just had my car insurance renewal and its gone up 25 % in last year. I am not in work nor have been for last 8 years due to a mental health problem , however this does not affect my driving .
I have noticed i can get insurance a lot cheaper £ 50 off my current premium of £200 if i delare iam retired instead of unemployed .
I cant believe i am been penalised by the insurance industry for being out of work as i have little money to run my car and only do average 2,000 miles per year .

I would be grateful if someone could give me some advice as to whether stating iam retired instead of unemployed is ok and legal ?

cheers Darren

dogbot

If you are receiving a pension and not in work you are retired. If not, you are unemployed. The premium is higher because the risk is statisticaly higher.

Sylvia_Phillips

darz456 wrote: »

Hi i just had my car insurance renewal and its gone up 25 % in last year. I am not in work nor have been for last 8 years due to a mental health problem , however this does not affect my driving .
I have noticed i can get insurance a lot cheaper £ 50 off my current premium of £200 if i delare iam retired instead of unemployed .
I cant believe i am been penalised by the insurance industry for being out of work as i have little money to run my car and only do average 2,000 miles per year .

I would be grateful if someone could give me some advice as to whether stating iam retired instead of unemployed is ok and legal ?

cheers Darren

It's disgusting isn't it! I'm incapacitated due to major spinal surgery, and when I used checked the unemployed option the premiums went up by over £100 compared to what I've been paying so far. I changed it to housewife and it went back down to something nearer what I've payed in the past. We're in a massive recession but insurance companies are penalising the unemployed! Greedy so and sos.

Sylvia_Phillips

dogbot wrote: »

If you are receiving a pension and not in work you are retired. If not, you are unemployed. The premium is higher because the risk is statisticaly higher.

How is the risk higher? You're less likely to leave your car away from home and less likely to be able to afford the petrol to use it more than if you're employed.

Badger_Lady

Confused.com has a "not employed due to disability" option - does this make it any cheaper than "unemployed"?

Evilm

I think "unemployed" would take account of having to use the car to travel to interviews, possibly in areas you are not used to driving and don't know well and therefore more at risk to have an accident?

If you aren't seeking work could you not just use "house(person)" or something?

neilcr_2

Evilm wrote: »

I think "unemployed" would take account of having to use the car to travel to interviews, possibly in areas you are not used to driving and don't know well and therefore more at risk to have an accident?

That's a bit of a silly assumption. I quite often drive to places I am not familiar with both when I was employed (37 years) and now unemployed and have never made a claim in 37 years of driving. With sat navs & even google maps commonplace these days unfamiliar places should not be a problem.

dogbot

The causes for statistical correlation can be debated - the fact is that claims experience indicates that the risk is higher and so the price is also higher.

The UK has just about the most competitive market for motor insurance in the world. If rates were 'unjustly' high for an occupation - say the unemployed - then that wouldn't last long as someone in the market would work it out, drop their rates just a bit and take all the business. Everyone else would then follow suit and so ensues a race to the bottom (which is essentialy much what happened in the early 1990's with all motor insurance and the growth choice and of the direct market).

If you want to speculate then I fear that what has been ignored is the increased potential for higher moral hazard. Please note what I am saying, it is potential not certain and that is the whole point about risk assessment - it is rarely a certainty.

For example, those who are unemployed may be more likely (note, not certain!) to need income and cash, so may be more likley to claim. Those involved in fraudulent motor claims, particulalry higher value ones, are more often than not, "unemployed". The unemployed, particularly those who have been so for a long time, have less money and inclination to maintain their vehicle so it may be less reliable. They MIGHT also have less to lose if something goes wrong in life - e.g. they have a crash - so may drive with less care.

Are all unemployed people bad drivers, or very likley to have a crash? No, but a large number are. Are all unemployed persons the same? No - hence, as someone has indicated, options include things unemployed due to disability.

Those who drive less - by which i mean very little - 2k miles a year or less ish - have much less experience on the road and become less used to driving, so often have a higher propensity to crash.


The same debate goes on here all the time - "why are young drivers so expensive, my son/daughter/I/my neighbour/friend are excellent drivers and not like them, they are not boy/girl racers" etc... If insurers could, they would love to be able to differentiate between people more - it is exactly why you have to answer quite a few questions when looking for a quote and why some are trying technology to help e.g. black box in the car.