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Car insurance for unemployed drivers

Car insurance for unemployed drivers

Does being between jobs or claiming benefits make a difference to your car insurance? If you’re a jobseeker looking to save money on your premiums, find out how to go about it.

Daniel Hutson
From the Motor team
minute read
Do you know someone who could benefit from this article?
Posted 15 JANUARY 2020

Does car insurance cost more if you’re unemployed?

Unfair as it might seem, the answer is often ‘yes’. Without a job, you may be considered a higher risk by insurance providers. This can hike up costs, come renewal time. 

Why are unemployed drivers seen as high risk?

Insurance providers may consider that unemployed drivers are:

  • Less likely to maintain their car With less disposable income available, unemployed drivers may try to save money on their car’s upkeep 
  • More likely to claim According to insurance statistics, claims are higher among long-term unemployed people
  • A higher credit risk Unemployment may make it less possible to settle debts
  • Likely to be driving more often Unemployed drivers might be travelling more and driving to unfamiliar places while seeking work
  • Distracted by their circumstances With job-search worries on their minds, drivers may be more likely to get into an accident                                                                

For these reasons, a change in employment circumstances often means insurance providers charge a higher premium.

How to find car insurance for unemployed drivers

While cheap car insurance for the unemployed may be hard to come by, there could be other ways to bring the cost of your premium down.

  • Be rewarded for safe driving Consider a ‘black box’ or telematics policy and you could be rewarded with lower premiums for driving safely.
  • Reduce your annual mileage Without a hefty commute, unemployment could reduce your annual mileage which, in turn, could cut your renewal costs.
  • Add a named driver Adding someone else to your policy as a named driver may reduce your premium. Especially if they have a large no claims discount and a clean driving history.
  • Remove business and commuting from your policy If you no longer use your car to get to work, or as part of your job, you may be able to save money by removing business cover from your policy.
  • Save money by switching earlier rather than later The optimum time to switch your car insurance is three weeks before your renewal date.

Take a look at some other ways to reduce your car insurance premiums.

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