Does Being Unemployed Make a Difference to My Insurance Company?

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Does Being Unemployed Make a Difference to My Insurance Company?

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Car insurance companies are primarily concerned with a driver’s risk of causing an accident during their daily commute to the office or when they’re driving a long distance for a family vacation or holiday celebration.

These concerns generally do not consider employment status to be a fact, which explains why so many stay-at-home moms and dads can secure car insurance without having a full-time job or any job at all.

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Those drivers who go from full-time employment to simply losing a job should not worry about any immediate, negative impacts on the nature of their coverage or the cost of their policy, simply because their position has been eliminated.

With that said, the price and nature of an auto insurance policy can certainly be adjusted based on employment status and other considerations. For those drivers who have recently become unemployed, there are a number of reasons that it might sometimes be necessary to contact a car insurance company.

For example: in light of a change in weekly hours. Let’s discuss a few more in the subsequent paragraphs.

Unemployment Means Lower Mileage Per Week, Month, or Even Year

Workers who lose their jobs are almost always looking for ways to bring down expenses until a new job opens up and their budget gets back to normal. This represents one of the main reasons to contact an insurance company after losing employment. However, there is no need to tell the insurance agency at once that a plan is being modified due to a job having been lost or a furlough having been enforced.

Because drivers who lose their full-time or part-time jobs will be driving less, due to the commute to the office being eliminated, it might be a good idea to call the insurance company and let them know about this reduced amount of mileage.

For the months when lower mileage is in effect, a policy’s overall cost will drop quite significantly. This is because the risk posed to the insurer drops as the number of miles put on the vehicle each month does the same.

Budgetary Concerns Might Require a Change in Coverage

Most drivers enjoy the benefit of comprehensive and collision coverage on their vehicles but, in the event of unemployment, these policies might simply become too expensive to sustain.

  • Many drivers faced with the uncertainty of job loss simply call their insurance company or log into their account’s online management portal to rearrange coverage and drop non-essential policies in order to save money.
  • Though it’s often easy and highly affordable to reduce or eliminate comprehensive coverage during unemployment, motorists should keep in mind that most states do require this coverage to be maintained on vehicles that are still financed or under lien.

Therefore, it may be a good idea to check with state laws and regulations prior to asking for thsi policy change.

Let the Insurer Know if the Nature of the Policy Has Changed

Many people have jobs that require them to use their vehicle as part of their daily work. Even more, many people routinely haul expensive equipment in their cars throughout the day that require them to have extra insurance coverage in order to compensate for a total loss of this equipment.

  • For those people who use their car on the job and pay an added premium for doing so, it might be a good idea to contact the insurance company and let them know that things have changed.
  • This doesn’t mean that it’s necessary to confess unemployment status to an insurance agency. Instead, drivers could simply note that they’re no longer driving on the job or hauling expensive equipment around.

The insurance policy can be adjusted, no questions asked, to compensate for this change in daily driving habits.

Avoid Switching Car Insurance Companies

While there is no need to inform an existing insurance company about job loss, switching companies will often require policyholders to enter home address, work address, and general employment information in order to obtain a quote and lock in a given rate on any level of coverage.

  • These quote forms do present the option to select “unemployed” rather than entering job information, and those drivers who are looking to steer clear of insurance fraud simply can’t list anything else in place of this notation.
  • The result is generally a slightly more expensive insurance quote than would be delivered to a driver with active employment either part-time or full-time.
  • Because of this distinct disadvantage, drivers might want to stick it out with their current insurer until they resolve their unemployment struggles and find work with another company.
  • Smart Changes Make it Easy to Stay Insured While Unemployed

    Though there is no requirement to contact an insurance company in the event of unemployment, many drivers will end up calling their insurer to achieve lower policy payments and more sensible insurance terms during their period of unemployment.

    That’s perfectly acceptable and actually quite typical, and drivers should feel confident requesting these changes for as long as they need them.

    Scott Desind of has represented thousands of traffic cases in a span of 25 years and works with a team of qualified attorneys. They regularly publish their experience and insights to their blog.

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