Tuesday, June 11, 2024

Does Being Unemployed Affect Car Insurance

Don't Miss

Renewing Your Car Insurance Best Policy Is To Avoid Saying Unemployed

What Age Does Car Insurance Go Down? | CAR INSURANCE UNTOLD SECRETS

Miles Brignall

Next time your car insurance renewal comes through, dont fall into the trap of describing yourself as unemployed if, for example, you are retired, a student or a housewife/house husband. If you do, you could end up paying 50% more.

That was the warning this week from an insurance comparison website, which ran a series of quotes where the only adjustment was the recorded occupation.

MoneySuperMarket says students and retired people who mistakenly describe themselves as unemployed have the most to lose potentially up to £700 a year in the worst cases. Retirees who do the same may have to cough up an additional 37% , it found.

Its the same for stay-at-home parents: if ticking unemployed instead of housewife or home keeper option, applicants could see their costs rise by 26%. If you are retired, but put yourself down on your renewal as a housewife/home keeper, this may well add 6%. And calling yourself a student rather than an apprentice could save 13%, or £181. In each case, all other factors were the same.

Kevin Pratt, consumer affairs expert at MoneySuperMarket, says: To get the best cover, at the best price, you have to choose the most accurate answer at every stage. That can mean trying alternatives to find the one that best matches your situation, instead of plumping for whatever seems most obvious. Its worth taking your time.

Its All About You We Want To Help You Make The Right Coverage Choices

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships dont influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

On This Page

Does being unemployed affect your auto insurance? If youre out of work, its difficult to qualify for things like auto loans or credit cards. Lenders and credit card issuers only offer credit to people who have a regular and reliable source of income. But is there auto insurance for the unemployed?

You might assume auto insurers do the same, but your employment status has little to do with your eligibility for coverage through any carrier.

More:Can I get cheap auto insurance for my old car?

While being unemployed wont affect your ability to qualify for preferred or standard auto insurance policies, it can have an impact on your ability to find cheap auto insurance rates.

You need to understand exactly how car insurance rates for the unemployed are calculated and personalized when youre shopping around for coverage.

More:3 Tips to Buy Cheap Commercial Auto Insurance

What Should I Do If My Job Title Means Higher Car Insurance

If you’re being quoted sky-high costs for car insurance, and its because you have a high-risk job, there are ways you can cut costs.

  • Check if you’re able to use a different title for your job that still accurately reflects what you do
  • Let your insurer know if you use your car for work
  • Restrict your annual mileage if youre able to
  • Increase the excess you pay to reduce your costs
  • Shop around to find a better deal elsewhere


  • Lie about your job title or the kind of work you do
  • Take the first quote youre given, its important to compare policies and prices

Don’t Miss: Can I File For Unemployment While On Workers Comp

Additional Ways To Improve Your Insurance Score And Lower Your Premiums

You may have committed to your career and dont envision a move to a new industry. There are still ways that you can reduce your monthly auto insurance premiums by making changes that impact your insurance score in a positive way.

  • Be sure to report any changes to your salary, such as annual increases, one-time bonuses, or changes in commission structures. Remember, income affects car insurance rates and the more you make, the less you may pay. An increase in income may positively impact your insurance score.
  • Improve your credit score. Your credit history and score are a big part of your overall insurance score. A good credit score demonstrates your ability to manage your finances in a solid way. Increasing your credit score may make the single biggest impact to the ability to get reduced insurance rates.

You can get access to your entire credit report for free from each of the three credit agencies once per year . Once you obtain each of the three credit reports, then go over it with a fine-tooth comb. Challenge any discrepancies and see where you can make changes that will pump up your score.

  • Another way to improve your auto insurance premium is to realign your debt-to-income ratio . To figure your debt-to-income ratio, just add up your monthly debt payments and divide by your gross monthly income.
  • Be careful behind the wheel! Seems simple enough, but a single ticket or fender bender that you file a claim for lowers your ability to get low auto insurance.

The Bottom Line: How Occupation Affects Car Insurance

Unemployed Drivers Could See Car Insurance Rise by More Than 50%

Each car insurance company assesses occupational risk differently. High-risk jobs could mean higher rates, and low-risk jobs could entitle you to a discount.

Ask your colleagues or co-workers for recommendations or conduct thorough research online for providers offering an applicable discount.

Since each car insurance company weighs risk differently, compare multiple companies to find the best rates and discounts.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

Recommended Reading: How To Sign Up For Unemployment In New Mexico

What To Ask Your Insurance Company If You Get Laid Off

If you get laid off and can still afford your car insurance, you dont necessarily need to contact your insurance company. That said, if you can no longer afford your insurance you should contact your insurance company to talk about how to lower your rates.

Below are some questions you should ask that could result in cheaper insurance premiums.

  • Should I reduce my coverage limits?: Your coverage limit is the maximum amount your insurance company will pay you out for a covered claim. The higher you set your coverage limits the more expensive your premiums will be because you are paying for more protection. If you reduce your coverage limits the cost of your premiums will decrease, but you are also less protected if you get in an accident. At the very least, you can lower your policy to only your state minimums.

Tweaking Your Job Title For Cheaper Insurance

If you do test the impact of different job titles on the cost of car insurance, bear in mind that your stated occupation must accurately describe your profession. For example, you might find that a proof reader is a lower risk than an editor. A legal secretary might pay less than a law clerk while a café worker could be a better job title than kitchen worker.

If you veer too far from your actual occupation, though, you could be guilty of fraud and you risk invalidating your insurance as well as facing a criminal conviction.

Also Check: How Do You Know If You Are Approved For Unemployment

Legal Professional Car Insurance Rates

Jobs in the legal profession tend to be high-stress and require great attention to detail, long hours, and unpredictable results, meaning the stress can be ongoing. Attorneys often take the stress of their work home and on the road.

Here is a look at potential discounted rates for legal professionals, based on an average 4% discount for the entire group:

GEICO Car Insurance Discounts for Legal Professionals


Car insurance rates for attorneys, lawyers, and judges are usually higher than average when it comes to occupation.

Trials and client meetings can occur at any time, day or night. When working on a case, an attorney may also work overtime, meaning theyll drive at different hours.

Military Auto Insurance Rates

How did expanded Unemployment Insurance affect the COVID-19 economy?

If youve served in the U.S. military, you may be eligible to save on your car insurance.

This table shows average car insurance rates for different military professions.

Average Annual GEICO/USAA Car Insurance Rates for Military Personnel and Veterans


Many auto insurers offer car insurance discounts for military members and their families.

For example, GEICO offers a discount of up to 15% to military members and specific military organizations, such as The Association of the United States Army, The Navy Federal Credit Union, and The National Military Family Association.

On the other hand, USAA only offers coverage to military members and their families. You must be an active, honorable discharged, or retired member of the U.S. armed forces to get a USAA policy.

Many insurance companies also offer special rates and discounts for veterans and those garaging their vehicles while deployed.

Those who served in the military are less of a risk to insure than civilians, so they often qualify for discounts. Since military personnel receive intensive training to operate different types of machinery, theyre low-risk drivers, qualifying them for a lifelong discount.

Recommended Reading: Can You File Taxes For Unemployment

Car Insurance And Covid

If youve recently lost your job because of the COVID-19 pandemic, many insurance companies are offering some form of financial assistance. Major car insurance companies have responded in the following ways:

  • Paybacks on a percentage of monthly premiums

  • Payment extensions

  • Holds on policy terminations due to nonpayment

  • A flat rate refund for policyholders

More Time On The Road

There are arguments both ways for this point. Some will argue that since you are out of a job, you will be driving less as there are no more commutes to and from work. This means less time on the road and a reduced likelihood of getting in an accident.

Others will say that since you are out of a job, you will be spending more time on the road driving to job interviews and back, hence more time on the road that your typical drive to and from work.

In addition to that, you will be driving on less familiar roads which increase the chances getting into an accident. Whether this factor increases or reduces your rates really depends on the insurance company.

Auto insurance providers determine risk factor using their own statistical data, and if you lose your job, your rates are more likely to go up. However, you can always compare quotes from other car insurance companies. If you get better rates, consider switching carriers to find a more affordable auto insurance policy.

Also Check: How Do I Report Unemployment On My Taxes

Compare Rates And Check For Discounts

If you are looking for a new policy or if you have an existing policy, losing your job could present a good opportunity to get insurance quotes from different companies. Each carrier offers different rates, so the same coverage could cost a different amount. Shopping allows you to compare rates to find a policy that fits your budget. Additionally, you may want to talk to a company representative about potential car insurance discounts. You may qualify for savings that you werent aware of, which could help you lower your premium.

A High Risk Job Title Doesnt Necessarily Mean Youre Likely To Make More Claims

Car insurance UK: Policy agreement could be invalidated by being made ...

The paradox is that even if your job title puts you into a high risk category for car insurance, available data doesnt necessarily show that youre more likely to make an at-fault claim than drivers in other professions.

To examine this in more detail we studied some research carried out by GoCompare earlier this year. This is Money published part of that research, listing the occupations most and least likely to affect your insurance premium.

You May Like: When Will I Get The 300 Unemployment

How Does Your Employment Status Affect Vehicle Usage Classifications

Are you wondering how do I get insurance without a job? While you can buy insurance no matter your employment status, it may change your rates. Just because insurers cant look at your employment status or income when determining eligibility doesnt mean that being in search of a job doesnt have an indirect effect on your rates.

When you apply for coverage, the insurance company will use dozens of rating categories to calculate your personalized rate. One of the factors that they use is vehicle usage.

When an agent asks you how you primarily drive your vehicle, you must choose from three options: pleasure, commute, and business. When youre working, its common for your primary vehicle to be assigned as a commuter car or a business car.

After you leave your job, you go from that class to a pleasure user, which is the cheapest option available.

Compare Car Insurance Rates

Simply enter your zipcode to compare car insurance rates and find the best coverage.

About Kathryn Morstad

Kathryn has a background as a small business owner and currency trader. Kathryn also enjoyed a career as a Regional Director and COO in healthcare, specializing in operations, third-party insurance reimbursement, and revenue cycle management.

Read Also: How Can I Find Out My Pin Number For Unemployment

Does Being Unemployed Affect Your Car Insurance

Getting by is difficult when you dont have a job. When you lose your job, you lose access to credit cards and auto loans, as these companies and lenders will only extend their services to people with regular and reliable sources of income. Many people are actually surprised that auto insurance providers dont do the same. Your employment status doesnt deny you coverage.

However, despite the fact that being unemployed wont keep you from obtaining auto insurance, it does affect your rates.

There are many factors that affect how auto insurance rates are determined including age, location, driving history, and credit history, but it all boils down to your risk factor. Somehow, in the eyes of auto insurance providers, being unemployed increases your risk factor. By being a high-risk driver, your insurance policy will increase in price.

Compare quotes from the top car insurance companies and save

Secured with SHA-256 Encryption

Age And Driving Experience

5 factors that affect what you pay for auto insurance

Young and inexperienced drivers will pay higher car insurance rates because they pose a higher risk for car accidents. For example, drivers between the ages 16 and 19 are three times more likely to be involved in a fatal crash than drivers over the age of 20, according to the Insurance Institute for Highway Safety.

Recommended Reading: How Can I Quit My Job And Get Unemployment

Should I Adjust My Job Title When Buying Car Insurance

Certain jobs can be defined in different ways. For example, a journalist may equally be classified as a writer. Its not inaccurate to use a different title and it may have a bearing on the price of the policy.

If your occupation could have multiple accurate definitions, see which one costs less.

However, you cant lie about your job so follow your gut feeling. If youre describing your occupation accurately then you dont have anything to worry about.

Medical Professional Auto Insurance Rates

Car insurance rates for a medical doctor or dentist can vary due to a lot of factors. Medical professionals may be eligible for car insurance discounts because the education required to become a medical professional can indicate your level of responsibility.

This table shows average GEICO car insurance rates for medical professionals.

Average GEICO Car Insurance Rates for Medical Professionals


While doctors statistically get into more accidents than teachers, the difference in their car insurance rates is relatively low compared to the difference in salary between the two professions.

Doctors are less likely than teachers to file a claim with their insurance companies for a minor fender bender, choosing to pay out-of-pocket expenses rather than incur a potential hike in rates.

When the insurance company saves money on claims, they pass those savings on to the medical professionals.

Read Also: How Do I Calculate My Unemployment Benefits In North Carolina

What Are The Car Insurance Occupation Categories

Historically, insurers had a list of job titles and they’d use this to price policies. However, now things have changed and there are many factors included in the price drivers pay for insurance.

Insurers base everything on risk profiles so when they see a job title they analyse how likely a person with this job is to make an insurance claim. Insurers also look at how many people in an area have the same job and this could affect the price.

This is because insurers dont want to insure too many people living in a specific location as it increases the risk that they have to pay out if theres an insurance claim.

Your Car Insurance History

Does being unemployed affect my car insurance?

If you are a new driver and this is your first car insurance policy, you can expect to pay a higher rate. Thats because car insurance companies wont have much information to evaluate your risk.

A coverage gap can also cause higher rates when you buy auto insurance. This is a period of time when you dont have car insurance. For example, if your car insurance company canceled you for non-payment or you were between cars and didnt have auto insurance. Insurers see the coverage gap as a higher risk, which often translates to higher insurance premiums.

If you dont have car insurance but want to avoid a coverage gap , non-owner car insurance is a good option to maintain continuous car insurance coverage.

Recommended Reading: Can I Apply For Unemployment Online

More articles

Popular Articles