Builders and estate agents 'cut out of insurance deals'

It seems the ubiquitous credit crunch is going to hit some people harder than others, especially in terms of insurance.

National newspaper the Times is reporting that brokers have embarked on a blacklisting mission of all those who work in jobs relating to the housing market.

Estate agents, builders and City firm employees are finding themselves fast becoming undesirable candidates as the power of the credit crunch takes full effect.

Cheap income protection broker Wessex Administrative Services told the paper that it is most likely not going to cover those professionals who are at most risk from the economic slowdown.

It said: "We currently have a blanket exclusion for certain professions like homebuilders.

"Employees in some other sectors such as estate agents and City workers may be asked additional questions."

However, another broker British Insurance is taking a different approach and does not even ask a customer to outline their profession before granting cover.

Simon Burgess of British Insurance told the Times: "Payment-protection providers have always excluded certain people if they think it's too risky to provide cover.

"However, it's unacceptable that entire sectors are being denied cover."

Other firms such as Cardif Pinnacle are still providing income protection insurance for all types of employees but have hiked up prices for certain kinds of professionals – the last thing a builder will need during an economic downturn.

However, perhaps due to the recent tightening of purse strings, Brits seem unwilling to take out insurance policies, which could offer a fall-back if things were to take a turn for the worse.

The Fair Investment Company reports that research undertaken by the Association of British Insurers (ABI) has found that almost 70 per cent of Brits are unwilling to take out payment protection policies.

Despite this, 90 per cent of those polled though the country's economy is in a worse state now than it was a year ago and 80 per cent expect this to worsen.

There appears to be a disparity here between the positive action people are prepared to take in order to insure themselves against such a downturn and what they perceive is likely to happen.

Payment protection insurance, much like income protection, means that if an individual were to loose their job or experience a rehabilitating medical problem, the broker would see that their bills were paid.

This sort of cover can mean the difference between being repossessed and keeping the assets that an individual has worked hard for.

Nick Kirwan, the ABI's assistant director of health and protection insurance, said: "It is worrying that so many people are not prepared to look at taking out protection insurance, even insurance which covers redundancy given the uncertain economic outlook."

He added that the ABI will work harder to ensure that people are aware of the financial risks the current economic climate holds.