Car insurance more expensive for unemployed

rev_henry

To the OP, yes I believe with some insurers you can put down 'umemployed' as employment status but then put down what your profession is in the 'job title' field, to show you're not a drug dealer or career unemployed person so to speak.

I don't think its unfair that the unemployed are charged more. Reasons I could think of (obviously not necessarily actual reasons used by insurers) are career criminals, unemployed people short of money or whatever and more inclined to make fraudulent claims. Etc etc.

InsideInsurance - is it not the case that it is illegal for insurers to share risk information as this would be collusion/price fixing?

InsideInsurance

It would depend exactly what they were sharing....

I assumed it was raw data in which case pricing information wouldn't be on there but you could calculate the average loss/ claims frequency for different segments of the market.

As such it certainly wouldn't be price fixing as no pricing information would be shared but if it would be considered collusion, I don't know.

Tremour-88

I tested this last month by getting 2 quotes on my car which is a Ford Focus 2000 1.8, I'm 23-male with 3 years NCB

1st Quote: Me, Fully Comp, 8,000 miles per year, Social only, Unemployed - £1218
2nd Quote: Me, Fully Comp, 18,000 miles per year, Social + business use, Self-Employed - £788

So they would charge me nearly £500 more for LESS miles, car insurance makes no sence.

InsideInsurance

As already explained, insurance works on statistics not "sense" (in many cases). You can try and rationalise it if you want and the most common theories have already been outlined in the many other threads on this topic over the last two weeks (and i wont repeat them as they are naturally sweeping generalisations but then thats what statistics do)

mikey72

InsideInsurance wrote: »

As already explained, insurance works on statistics not "sense" (in many cases)..............

InsideInsurance wrote: »

.............but then people claim that you can prove anything you want with statistics.

You see my problem with merely believing, or even worse, mindlessly regurgitating popular buzz words on why unemployed/young/male etc drivers should be charged more?

With the right statistics I could probably prove those without cars have more accidents than those with.

Spiderham

InsideInsurance wrote: »

As already explained, insurance works on statistics not "sense" (in many cases). You can try and rationalise it if you want and the most common theories have already been outlined in the many other threads on this topic over the last two weeks (and i wont repeat them as they are naturally sweeping generalisations but then thats what statistics do)

Pretty much this. Insurance companies are businesses there to make a profit, not sociologists or social engineers. The safest way to price people is commensurate with risk so that you are not at the mercies of your business split for profitability. Cross-subsidising puts you at this risk. The insurers probably aren't going to spend a long time working out the whys and wherefores of the reason performance is bad, they're just going to rate accordingly on the best risk indicators.

Spiderham

mikey72 wrote: »

You see my problem with merely believing, or even worse, mindlessly regurgitating popular buzz words on why unemployed/young/male etc drivers should be charged more?

With the right statistics I could probably prove those without cars have more accidents than those with.

But why would it be in the interest of insurers to charge employed people less than they should?

lisyloo

You see my problem with merely believing, or even worse, mindlessly regurgitating popular buzz words on why unemployed/young/male etc drivers should be charged more?

Why not look for the statistics then?

I am sure you could find some independent stats on these matters.
For example the IAM (institute of Advance Motorists) do some policy and research.
They are a charity who promote road safvety so I don't think they have any commercial axe to grind.

Here is one of their publications although there are more if you want to look
http://www.iam.org.uk/images/stories/Policy_Research/IAM%20Factors%20in%20Accident%20Report.pdf

Here's some info related to age and a table of figures (percentages is in the report).

‘Driver error or reaction’ is reported more frequently for younger and older drivers
than for those between 30 and 70, reflecting factors such as poor judgement by
younger drivers and decrease in functioning among older drivers
• ‘Injudicious action’ and ‘behaviour or inexperience’ are reported more frequently for
drivers under 30, and particularly under 20, than for drivers over 30
• ‘Impairment or distraction’ is reported more frequently for drivers over 70 and slightly
more frequently for those under 30, than for those aged 30-70, again reflecting
decrease in functioning among older drivers
• ‘Road environment’ factors are also reported more frequently for younger drivers,
particularly those under 20, reflecting inexperience and poor judgement in more
difficult driving conditions
• ‘Vehicle defects’, although reported in only a small proportion of accidents, are
reported for a larger proportion (1%) of drivers under 30, who tend to drive older
vehicles, than for drivers over 30 (around 0.5% - 0.7%).

They do have info on gender but probably not on job type as they aren't commercially orientated.
So I'm sure you could find much of this info independently of the industry from fairly trusted sources.

lisyloo

But why would it be in the interest of insurers to charge employed people less than they should?

Exactly, why would insurers give women, middle aged people, experienced people, claim-free people, conviction free people, employed people, advanced qualified people a discount without any reason whatsoever. We all agree they are running businesses mainly for profit so why on earth would they lower premiums without a good reason?
There is a good reason and it's because they want that business as those people statistically across a group have fewer claims, so it makes good business sense. Obviously there will be individual exceptions but it's not possible to employ a private investigator for each individual to see if you buck the trend.

As an aside a few years ago I offered to start a business offering completely fair quotes. It involved a medical, questionaire, driving test, psychometric testing etc. It was £400 for a quote. Funnily enough I got no takers so I think people should remeber that when they are getting their free quotes on a freephone number.

mikey72

Spiderham wrote: »

But why would it be in the interest of insurers to charge employed people less than they should?

I entirely agree with you.
It certainly is in the insurers interests to charge anyone more than they should.
But "should" is subjective. From any commercial viewpoint, "should" is as much as possible to make the greatest profits.