Thousands of employees across Northern Ireland who are expected to be made redundant due to Covid-19 may face a 30% rise in car insurance prices as a result.
Insurance comparison site CompareNI.com has now warned that those made redundant should prepare for additional hardship as their insurance premiums and renewals are likely to increase. The algorithms that determine insurance prices can differ from company to company, but most will consider employment status as a key risk factor and so discriminate against the unemployed.
The site analysed over 1 million car insurance quotes in order to determine the impact that occupational status has on prices, and discovered that unemployed drivers pay an average of 30% more for their car insurance. It now warns that those unexpectedly made redundant due to Covid-19 may find themselves even worse off than they expected.
Unemployment figures could rise to up to 100,000 people by the end of the year, and the number of redundancies taking place in June this year had already reached record levels. The UK Government's Coronavirus Job Retention Scheme managed to avoid many redundancies when the virus hit, but that support is being stepped down and many of those currently on the scheme will be without a job by the end of the year.
Drivers who are made redundant are contractually obligated to inform their car insurance providers of their new unemployed status, at which point the algorithms that determine car insurance price may increase their premiums by up to 30%. CompareNI.com founder Greg Wilson commented:
"Insurance claims data indicates that unemployed motorists are on average more likely to claim on their insurance than employed drivers. So while losing your job is going to be bad enough, our insurance premium data suggests many of these newly unemployed workers could be hit with a redundancy double whammy, with their car insurance premiums potentially rising by as much as 30% after their unemployed status is reflected in their risk profile."
Source: Written based on press release
