Cheap Car Insurance for Unemployed Drivers

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How to find the best car insurance while unemployed

Unemployment can be stressful, with the added burdens of housing, food and transportation costs — including the additional expense of auto insurance. Car insurance is legally required, even when you're unemployed, and there aren’t many resources available to help if you aren’t receiving regular paychecks. Luckily, car insurance quotes are free so you can quickly decide which company offers you the best value.  Let’s look at the cheapest car insurance for unemployed drivers.

 

Primary topics:
  1. Do car insurance companies charge unemployed drivers more?
  2. Why does employment status matter for insurance?
  3. Resources and tips
  4. What insurance providers are best for unemployed drivers?

 


 

Do unemployed people pay more for auto insurance?

Not necessarily. Insurance companies use as many factors as possible to calculate the risk presented by a potential client. These components may include a prospective customer's driving record, age, credit scorelocation, car make and model— but not necessarily a driver's occupation. However, an insurer can use a driver's job status to gauge their eligibility for car insurance discounts. We’ll explain that below.

Certain professions are less associated with risk than others, leading insurance companies to offer discounts for drivers employed in those professions. That said, insurance companies do not use your occupational status as a rating factor, nor do you have an obligation to tell your insurance company mid-policy term if you resign from or are terminated from your job.

Insurance companies cannot charge you more based on your line of work.

Learn more about the factors insurance companies use to calculate premiums.

 


 

Auto insurance and employment: how are they connected?

Not having a job won’t impact your insurance premium. However, what you do for a living may help you save money on your auto insurance policy. The occupations listed below are commonly rewarded with affinity or membership auto insurance discounts.

Even if you're unemployed, it is possible to save on auto insurance.

 


 

How to save on car insurance while unemployed

Although you’re not directly punished for lack of employment by your insurance company, your premiums provide the sting of spending money while your income is limited. So it's worth comparing quotes and finding ways to save.

 

Telematics

Telematics, or usage-based insurance, is a growing trend in the insurance industry. Telematics are in-car devices used to track your driving habits. Those habits will help an insurance company set a premium more representative of the risk you actually present to your insurance company. Your age, credit history, and location are all used as rating factors in most states for your premium that aren’t directly tied to how you drive.

Below are popular telematics programs and potential discounts:

CompanyEstimated Savings
Progressive's SnapShotAverage of $130
Allstate's DrivewiseAverage of 10-25%
State Farm Drive Safe & SaveUp to 15%
Esurance DriveSenseVaries
Nationwide SmartRideUp to 40%
Liberty Mutual RightTrackAverage of 5-30%

Not every state allows these programs. Check with your car insurance company to see if you are eligible.

 

Pay smart

The way in which you pay for insurance can help reduce your premium. For example, paying your premium at once rather than monthly can help reduce your installment and processing fees. This is called a paid in full discount.

PAYMENT METHOD SAVINGS FOR CAR INSURANCE
Savings with Paid in FullSavings with EFT
$69$22

The second part of our “paying smart” suggestions might be a little easier if you’re unable to pay your entire premium up front. Paying via electronic funds transfer (direct deposit from your bank account) can help eliminate pesky transaction fees associated with debit and credit cards. Although less than a paid in full discount, it can still be helpful.

 

Bundle your policies

If you own or rent an apartment, consider carrying your home or renters insurance with the same company as your auto policy (or vice-versa). This will save you the hassle of dealing with multiple insurance companies while potentially providing a multi-policy discount. While the discount below reflects the savings on your auto policy, you would receive a discount on both policies.

INSURANCE BUNDLE SAVINGS — HOME + AUTO AND RENTERS + AUTO
Savings with RentersSavings with Home
$73$142

The above data show traditional multi-policy parings (home/auto), but this discount can apply to any combination of two insurance policies.

Find an affordable policy today: compare car insurance quotes.

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Drive safely

Regardless of employment status, always strive to drive safely. But if you’re looking for work, road safety becomes even more important. Receiving a DUI citation can raise your premium by an average of $543 per six-month insurance policy. You could be charged for DUIs for a total of three years (or as many as 10 years in California). That $543 could become $3,258 over this three-year period.

TYPICAL INCREASE IN AUTO INSURANCE COSTS AFTER COMMON VIOLATIONS
Driving Violation6-Month Premium Increase
None 
Speeding 11 - 15 MPH Over Limit$154
Speeding 16 - 20 MPH Over Limit$171
Speeding 21 - 25 MPH Over Limit$190
At-Fault Accident$308
Reckless Driving$517
Racing$542
DUI$543

 

Be prudent with your car insurance coverage

Unlike a house, a car depreciates over time. So, if you bought a brand new vehicle a decade ago, chances are you don't need the same insurance protection you once had. The only coverages you are required by law to have (unless you have a lien) are your state liability limits. Other coverages, like comprehensive and collision, are designed to protect your car. Consider if the value of your vehicle (which can be easily determined through Kelley Bluebook or NADA guide) is worth what you pay for these additional coverages. Here are our quick tips for determining coverage:

  • Determine the value of your vehicle by using Kelley Blue Book and NADA guide
  • Contrast the premium with full coverage between only have liability coverage. If that difference in premium is enough to replace the value (determined in step 1), you probably don't need full coverage.
  • If the premium difference is not enough, consider raising your deductibles - by raising your deductibles you can lower your premium. If, however, you do raise your deductible, you increase your financial responsibility for any at-fault accidents. Your deductible is what you pay before the insurance company steps in.

 

Compare car insurance rates

Shopping for car insurance is probably the absolute best way to find a cheaper rate. You can look for all the discounts, consider all the telematics out there and still be paying an arm and a leg for auto insurance. Sometimes it’s just your company. The Zebra helps you compare more than 100 insurance companies online in order to find the best rates, saving you time to search for what you really want: a job.

Compare rates from leading insurance companies today!

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Car insurance and unemployment: FAQs

Which insurance companies are affordable for unemployed drivers?

Insurance is regulated at the state level and priced at the ZIP code level. It's very hard to prescribe the best car insurance for an unemployed driver without knowing more about the customer's driving profile. Your best bet is to compare free car insurance quotes often to see prices from as many insurance companies as possible.

If you'd like more specific information regarding insurers and car insurance premiums, consult some of our other articles:

 

Is it possible to find a car insurance policy without a job?

Yes. Car insurance companies cannot withhold coverage based solely on a potential customer's employment status.

Ava Lynch
Ava Lynch LinkedIn

Ava worked in the insurance industry as an agent for four-plus years. Currently providing insights and analysis as one of The Zebra’s resident property insurance experts, Ava has been featured in publications such as U.S. News & World Report, GasBuddy, and Yahoo! Finance.