MSE News: Jobless get walloped when buying insurance 25 May 2012 at 4:13PM in Insurance & life assurance 105 replies 17.1K views

Former_MSE_Helen

"The unemployed are sometimes charged over five times more for their insurance than those in work ..."

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Jobless get walloped when buying insurance

michaels

If it didn't make actuarial sense then a company could charge slightly lower premiums for the unemployed, get all of this business and make huge profits...why don't they?

Not so convinced re the insurance company line on the unemployed/homemaker bit. If my SAHM wife decided to start looking for jobs (whilst carrying on being a 'homemaker' until she found a job) I would be surprised if an insurance company that tried to refuse a claim on the grounds that she was actually unemployed would get very far in court.

dunstonh

"The proper solution is for insurers to charge fair amounts and not let one small change disproportionately skew prices astronomically high.

Or the unemployed, as a collective average, should commit less fraud than employed people. Then the insurers wouldnt have to increase their prices.

A bitter pill for the honest unemployed but insurance is priced on statistics.

Former_MSE_Dan

dunstonh wrote: »

Or the unemployed, as a collective average, should commit less fraud than employed people. Then the insurers wouldnt have to increase their prices.

A bitter pill for the honest unemployed but insurance is priced on statistics.

It's a tough one - I understand risk profiling, but can't help wishing it was more sophisticated than by one single action, the price someone owes goes up by £100s.

The price someone pays should be decided in a much more holistic fashion than that, in my view.

rudekid48

MSE_Dan wrote: »

It's a tough one - I understand risk profiling, but can't help wishing it was more sophisticated than by one single action, the price someone owes goes up by £100s.

The price someone pays should be decided in a much more holistic fashion than that, in my view.

I wanna live in Dan's world!!

westv

What about those who are volunteering whilst looking for paid employment? Even though their work isn't currently paid voluntary work is still a form of employment so presumably someone who did voluntary work in, say, a charity office somewhere could say they were a clerical worker or similar.

JuicyJesus

2sides2everystory wrote: »

That's about the most naive comment I have ever witnessed from you, dunstonh.

So how is insurance priced then, if not through statistical analysis of risk and potential customer value? I'd love to hear your absurd bank-bashing conspiracy theory for this one.

dunstonh

MSE_Dan wrote: »

It's a tough one - I understand risk profiling, but can't help wishing it was more sophisticated than by one single action, the price someone owes goes up by £100s.

The price someone pays should be decided in a much more holistic fashion than that, in my view.

In a soft market the increased risks do not reflect as much as a increased premium. In a hard market they do. Problem is that many insurance areas are in a hard market at present and this makes them particularly risk averse. It is the same reason that most high risk groups have seen large increases whilst low risk groups have seen little or no increase in premiums beyond inflation. Commercial cherry picking as they dont want the risk unless you pay for it.

PI insurance is in a hard market and firms are reporting 25-50% increases on last year and a doubling of the excesses. It happens and its frustrating but hopefully in a year or two it will move back to soft market as firms are attracted back.

vaio

JuicyJesus wrote: »

So how is insurance priced then, if not through statistical analysis of risk and potential customer value? I'd love to hear your absurd bank-bashing conspiracy theory for this one.

I'm sure statistics do come into but based on my experience of renewals vs new policy there is more than an element of "what they think they can get away with" too.

Last renewal offer £350, ringing to mention that new customer quote was less brought it down to £260, ringing again a week later to see if they could do better brought it down to £225, presumably they make money on £225 so the £350 price was what they thought they might get away with which in my book is akin to pick pocketing

Perelandra

Which leaves me to wonder if the job title you put in makes any difference either... whether (for example) "Financial Adviser" carries a different risk premium to, say, "Professional Gambler".

rs65

dunstonh wrote: »

PI insurance is in a hard market and firms are reporting 25-50% increases on last year and a doubling of the excesses. It happens and its frustrating but hopefully in a year or two it will move back to soft market as firms are attracted back.

Hard market? Maybe for one or two professions such as S&V surveyors but generally it has been soft for several years.