Insurers have started to blacklist people who work for housebuilders, City firms and estate agents on some protection policies as job losses start to bite.

Wessex Administrative Services, which provides cheap income-protection policies through Iprotect, says it is unlikely to provide cover for the professions most affected by the credit crunch.

Others such as Cardif Pinnacle have increased the cost of insurance overall to take account of the increased risk of job losses.

Those working for building firms including Barratt, Taylor Wimpey and Persimmon may be refused cover altogether, even if they have survived the latest cull in jobs.

Wessex 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.”

Though insurers usually ask if you are aware of any specific risk to your job — if you’ve been told that there will be job cuts for example — it is unusual for a whole sector to be blacklisted.

Protection-insurance policies, which can cover the cost of mortgage repayments or the loss of income through redundancy as well as accident or sickness, have seen a huge increase in applicants since the beginning of the year. Sales of payment-protection insurance, for example, have increased by 8% this year, according to the consumer website Onlyfinance.com.

Redundancies among housebuilders passed 6,000 last week after lay-offs by Barratt, Taylor Wimpey, Persimmon, Redrow, and Bovis Homes.

City workers and estate agents are also feeling the pinch. Martin Ellis, chief economist at Halifax, suggests unemployment may breach the 1m mark next year.

Overall unemployment is expected to rise this year for the first time since 1993, according to the Centre for Economic and Business Research, an independent think tank. It predicts benefit claimants to increase by as much as 17% next year, bringing the total to about 965,000.

Some firms such as British Insurance do not ask for a profession before accepting a customer. Simon Burgess of British Insurance said: “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.”

We offer some tips on protecting your family from job losses.