Cheap Car Insurance for the Unemployed

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What's cheap car insurance when you're unemployed?

Being unemployed can be terrifying as an adult. You still have to pay your rent/mortgage, eat, and usually you still often drive which means you need car insurance. Paying for insurance is legally required, even when you're unemployed, and yet there aren’t a lot of resources to help if you aren’t getting a regular paycheck. Well, that’s where we come in. Let’s explore cheap car insurance options if you’re unemployed.

Here’s our main topics:
  1. Can you be charged more if you’re uninsured?
  2. Why does employment status matter with insurance?
  3. What are your resources?
  4. Which companies should you consider?

Do unemployed people pay more for auto insurance?

In short, no. Insurance companies do use as many things as possible in order to accurately calculate the risk (i.e., premium you’d pay) you present to them. These things are usually your driving habits, location, what your drive, and your age — but not necessarily your occupation. They can use what you do as an indicator your potential as a customer, but we’ll explain that soon.

Certain professions are associated with a lowered risk than others and thus some companies offer discounts for those professions. With 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-term if you quit or lose your job. Insurance companies cannot charge you more based on what you do.

If you want to see what insurance companies do use to calculate premiums, see our guide here.

Being unemployed and insured

As we stated, the fact that you don’t have a job won’t impact your insurance premium. However, what you do for a living can impact your premium. Certain professions are associated with a lowered risk than others and thus some companies offer discounts for those professions. These occupations, listed below, are commonly rewarded with an affinity/membership discount.

  • Medical Professionals
  • First Responders
  • Engineers/Scientists
  • Architects
  • Teachers
  • Pilots
  • CPAs (Accountants)

Again, it is not that your insurance company will charge you more if you do not fall into one of these jobs. It’s that an insurance company will simply charge them less.

Regardless if you feel this is fair or not, we have a plan on how you can save while you’re unemployed.

How to save on car insurance while unemployed?

Although you’re not directly punished for being unemployed by your insurance company, you certainly still feel the sting of spending money while you’re not earning any. So, let’s get to saving.

Consider telematics

Telematics, or usage-based insurance, is a growing trend in the insurance industry. Basically, it uses an in-car device to track your driving habits. And your habits will determine a premium that is more representative of the kind of risk you actually are to your insurance company. Your age, credit history, and location are all big rating factors in most states for your premium that aren’t directly tied to how you drive. SO, if you’ve been unemployed for awhile, your credit might take a hit. Here are some companies and corresponding potential discounts for telematics.

Company Estimated Savings
Progressive's SnapShot Average of $130
Allstate's Drivewise Average of 10-25%
State Farm's Drive Safe & Save Up to 15%
Esurance's DriveSense Varies
Nationwide's SmartRide Up to 40%
Liberty Mutual's RightTrack Average of 5-30%

Consider, however, that not every state participates in these programs. Check with your 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 all of your premium up front rather than month-by-month can help reduce your installment and processing fees. This is called a paid in full discount and while we understand it’s not exactly practical to pay hundreds of dollars up front when you’re not earning any income, we thought we’d throw it out there.

Savings Based on Method of Payment

Savings with Paid in Full Savings with EFT
$61 $27

The second part of our “paying smart” suggestions might be a little easier if you’re unable to pay all of your premium up front. Paying by electronic funds transfer (direct deposit via 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 placing the insurance policies you have over your residence with the same company as your auto (or vise versa). This will not only save you some hassle of having to deal with multiple insurance companies (who likes that) but also give you a much adored multi-policy discount. While the discount below reflects the savings on your auto policy, you would receive a discount on both policies.

Savings on Bundles

Savings with Renters Savings with Home
$73 $142

Although our data reflection traditional multi-policy parings (home/auto), this discount can apply to any combination of two insurance policies.

Drive Safely

At any time, regardless of employment status, you should always strive to drive safely. But now that you’re looking for work this fact is even more important. As you can see below, receiving a DUI can raise your premium an average of $529 per a 6-month policy. Consider, however, that you will be charged for DUIs for a total of 3 years (on average, 10 years in California). So, that $529 will actually stretch into over $3,174 over your 3 year sentence.

Average Increase in Annual Premium in 2016

Accident/Violation 6 Month Premium Increase
Speeding 11 - 15 MPH Over Limit $141
Speeding 16 - 20 MPH Over Limit $153
Speeding 21 - 25 MPH Over Limit $165
At-Fault Accident $306
Reckless Driving $499
Racing $523
DUI $529

Be smart with your coverage

Unlike a house, a car depreciates in value over time. So, if you bought a brand new vehicle a decade ago, chances are you don't need the same insurance protections 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 collsion 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 reponsible for any at-fault accidents. As your deductible is what you pay before insurance company steps in.

Shop Around

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. Only with The Zebra can you shop hundreds of companies at once in order to find the best rate for you. Saving you time to search for what you really need - a job.

Ready to start comparing rates?

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Which company is the cheapest for you

Insurance is regulated at the state level, priced at the zip-code level, and reflective of many attributes of you. Which means, it's very hard to say which company will be the cheapest for you. Your best bet is to follow our advice regarding shopping around often in order to see as many companies as possible.

If you'd like more specific information regarding companies and premiums, see some of our case studies below.