Unemployed homeowners looking to insure their home could end up paying more for insurance because 'perceived' risks could add up to increased premiums.
With unemployment now totalling 2.47million in the UK, Confused.com is warning out of work homeowners that they could face higher premiums on their home insurance, because when carrying out risk assessments, providers take into consideration the likelihood of an applicant defaulting on payments.
Confused.com says that although some people may think the risk would be lowered by unemployment as their house would tend to be occupied during the day - therefore reducing the risk of burglary – the reality is the insurance provider sees the likelihood of accidental damage occurring as far greater if the home is occupied at all times.
The comparison website suggests there could be some truth is this presumption, particularly for people with young children who are making cuts in spending by taking them out of nurseries, as this could increase the risk of accidental damages in the home such as spillages.
Commenting, Darren Black, head of home insurance at Confused.com said: "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 is realistic for providers to perceive higher risks associated with this."
However, Mr Black is warning homeowners who are struggling with their finances not to overlook the importance of keeping up with their premiums.
"As soon as you miss a payment, the policy is in jeopardy which could mean disaster should a major event such as flood or fire affect a home. Taking a chance, and leaving your home uninsured is very dangerous for those already strapped for cash as a result of being out of work," he said.
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