When you’ve been made redundant, the first thing you will probably consider doing is tightening your belt, but unfortunately for some drivers, losing their job has had a negative effect on their car insurance as they’re hit with a rise in their premium.
In a case highlighted in The Mirror this week, 51-year-old Tony Costello revealed how his car insurance rocketed from £630 a year to £861 after he contacted his insurance company to inform them that he’d been made redundant.
After checking the small print on his insurance policy, Mr Costello found that his car insurer, Tesco, had stipulated that loss of employment can affect the cost of the premium.
The Association of British Insurers also reiterated this point, saying that many insurers increase the cost of cover after the policyholder loses their job as statistics there is an additional risk factor once a person becomes unemployed. There’s also an argument that the driver is likely to be on the road more as he or she is out looking for work and attending interviews.
The car insurance company in Tony’s case said that the additional £231 which had been added to the cost of his premium after he became unemployed would be refunded should he find work, although an admin cost of £15 would apply to each change made.