Unemployed? Don’t forget to tell your home insurance provider

With unemployment in the UK on the rise, many will be unaware of the effect it can have on household finances; there’s the greater potential for debt problems but there are also wider implications for such as home insurance.

Home insurance providers use a number of risk factors to determine the premium to charge.

Unemployment is one of these factors as it is considered an indicator of the likelihood that a policyholder will default on the premium payments.

Added to this is the increased risk of accidental damage as the home is occupied more of the time.

If you have been made redundant then no doubt your first priority will be to cover the key bills, such as the mortgage, ensuring you don’t add to your issues with debt problems.

It’s likely that your home insurance premiums will have a lower priority.

As Darren Black, head of home insurance at Confused.com, comments though ‘It is paramount that the importance of paying premiums is not overlooked.

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.’

Make sure you advise your provider if you do become unemployed. This will probably result in an increase in premium but this is unlikely to be applied until you renew the policy.

And remember you can often save money on your home insurance by using a comparison site, such as Confused.com or Gocompare.com.