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Car insurance for unemployed motorists

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You are filling in a car insurance application form and you are asked for your occupation. You are not currently in employment so what do you put?

Do I have to inform insurers if I am unemployed?

If you state that you are unemployed then you will probably pay a lot more for your cover – statistics suggest that you will pay around 30% more than someone who is in work. However if you put down anything which is untrue you risk having your insurance cancelled, which if you have a claim could be financially disastrous. You may also face prosecution for fraud if you do this deliberately.

Would you get away with giving incorrect information? No it's unlikely. Insurers have access to far more details about us than we think.

Anyone who has insurance cancelled because they have given untrue statements on a proposal form in the past is obliged to inform any future insurers of this. Many will refuse to insure this person and others are likely to increase premiums dramatically.

Why is car insurance more expensive for unemployed people?

All insurance premiums are based on statistics, and these show that people who are unemployed tend to have more accidents, car thefts, and other types of claim than the average person who is in work.

If I am retired, will my car insurer say I am unemployed?

No. You are only unemployed if you are out of work and looking for a job, or claiming unemployment benefit.

Do car insurers class me as unemployed if I am a houseperson?

No. If you stay at home, whether it is to look after the house, parents or children, you are not eligible for unemployment benefit and you are not therefore unemployed. When you fill in the application form under the employment section there is usually a box marked 'Other' and you can state there whether you are of independent means, or a houseperson.

Do I have to tell my car insurer if I am made redundant?

You should check the terms and conditions of your insurance policy documents. There are usually a list of things that you need to inform them of, within a reasonable space of time, during the period that you are insured. These normally cover factors such as a change of address, modifications to your car or criminal convictions that you have received.

Usually, however, the fact that you have been made redundant only needs to be communicated to them at renewal time.

Would a car insurer class me as unemployed, if I was self-employed but only part-time?

To be classed as unemployed you would need to be eligible to apply for unemployment benefit. This would not be the case if you was self-employed. You should therefore state this and then state the type of work that you do.

If I cannot work because of a disability will the car insurance company class me as unemployed?

there is usually a category called 'not employed due to disability'. This is normally under a heading marked 'other occupational status' or similar. In this case you should inform the DVLA of your disability. If you were notified by them that you could still continue driving it would be illegal for an insurer to refuse you a policy simply because of your disability.

So the answer is 'no'. Legally 'not employed' is different from 'unemployed'. However if you are in a similar situation you should always let your insurer know. Failing to do so could cause severe problems in the future if the insurer felt that they had been misled in any way.

Will being unemployed mean I have to pay for very expensive car insurance?

Not necessarily. Many different factors are taken into consideration when working out an insurance premium and your employment status is only one of them. If you compare multiple quotations online you have a good chance of finding much cheaper premiums. You can ask more than 100 insurers to give you quotations by clicking on the link buttons.

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