As unemployment figures climb higher than ever before, the 2.47 million unemployed in the UK could be facing even tougher times as home insurance premiums for those who are out of work could sky rocket.
The price increase, which is far from good news for those already strapped for cash due to losing their job, is down to ‘perceived’ risks from property owners spending more time in the house. Many people would assume that having a property that’s occupied full time would cut insurance costs as it reduces the risk of being burgled. However, so much time spent in the house means there’s a higher possibility of accidental damage occurring, especially if there are small children in the house. Unemployed parents tend to cut back on child care first, as there is someone available to look after them at home. This increases the chance of spillages, broken items and damage to the property, knocking up the cost of the insurance premium.
Not only this, but those who are just signing up to a policy or renewing their insurance will be given a new price based on the risk of not only accidental damage and burglary, but also how likely they are to default on a payment due to their unemployed status.
Despite this, homeowners are being urged not to write off insuring their home to save pennies - although premiums may go up if they are deemed high risk, it could cause more financial problems in the long term.
Darren Black, head of home insurance at Confused.com, explained: “With so many people out of work, Britain’s homes are under serious financial pressure. It may come as a surprise to many people that unemployment means pricier premiums. However, with the house occupied for longer periods of time, by more people, it’s realistic for providers to perceive higher risks associated with this.”