Research carried out by a price comparison website has shown that being made redundant can be expensive for motorists. uSwitch.com claim that redundancy can cause car insurance premiums to increase by an average of 20%

The price comparison website requested 12 different quotations from the insurers on its panel, based on the driver’s no claims history and age, to work out the cost.

All quotes were calculated for a male driver from Bourne, Lincolnshire who was employed as an administrator with a firm of accountants before being made redundant.

A 20-year-old driver with one year’s no claim bonus was the worst hit, seeing the cost of a year’s car insurance increase from £1,013.21 to £1,466.52 - a rise of £453.31 or 45%

A 20-year-old driver with three year’s no claim bonus was hit with a 21% increase in car insurance premium.

Although older drivers faced smaller increases, a 40-year-old driver without a no claim bonus was still facing a car insurance premium increase of 22%

uSwitch said that insurers calculate their car insurance premiums on the basis that a vehicle will not be used during a working week except for commuting and that if somebody is made redundant then their car usage will increase. This could be because they need to drive to job interviews or simply because they have more spare time.

Car Insurance always includes some exclusions and limitations which should be checked carefully. If in doubt you should check your car insurance policy wording carefully.

Visit www.car-insuranceuk.com regularly for the latest car insurance news and links to car insurance providers. Please follow the links on this page to obtain your own personalised car insurance quote and make your own comparison.

© January 2009