Being out of a job is tough stuff, and having to worry about insurance cover makes life a lot tougher. As a result of economic turmoil and layoffs, a huge number of people are out of work. Getting through this challenging time could be an uphill task. But don’t despair!
When someone’s out of work, cheap car insurance for unemployed makes sense. But picking out the right deal involves the right amount of facts. Without correct facts, getting excellent unemployed car insurance could be more challenging.
In this piece, you’ll get access to top tips that’ll assure a soft landing in these trying times. Also, several other tips to ensure you make no mistakes due to the new status will keep your cover intact.
How Does Being Unemployed Affect Car Insurance?
Being unemployed isn’t put in play by insurers, but several factors linked to the new status could spell trouble.
Also, it’s not all doom and gloom as unemployed drivers could find some relief from these factors. And among the myriad of issues unemployment can cause for your car insurance, here’re the top three;
Discounts based on occupation
Even though unemployment doesn’t get frowned at by insurers, several job titles attract discounts unemployed policy holders don’t.
For example, a serviceman, registered nurse, or teacher usually qualifies for a discount from several providers. Such benefits get eroded fast if you wind up unemployed all of a sudden.
Credit index
Maintaining a high credit score is essential, even more so when there’s no job to go to at the moment. Falling behind on several credit payments could cause a dip in your credit score.
And when your payments don’t keep coming in, your credit score takes a hit. Poor credit scores affect your insurance premiums as insurers no longer see you as less likely to file for claims.
Road frequency
Being out of work means less commuting to work and back. If you fall into such a category, then there’s some good news! Lesser use of your vehicle could mean a lower premium rate.
On the flip side, if you get into a massive rush for a new job and use your car more, expect your rates to go up.
Other factors that could affect your insurance
Loss of claims
Even if policy buyers are out of work, policy providers may initiate a price spike to cover losses. Several insurers suffer losses from doling out claim payments.
Tariff changes
Spikes in tariffs could happen anywhere and at any time. For example, an increase in the price of car parts required to fix your vehicle could cause a rate increment. Also, changes to several other factors could cause policy providers to slap a price increase on your premiums.
Should I Cancel My Car Insurance?
It would be unwise to cancel your policy due to unemployment. A lot of adverse stuff could crop up with such a hasty move. Here’s some stuff that could directly result from canceling your insurance cover;
Higher premiums for a new policy
When you’re registering a new policy with another company, your preferred provider takes a look at your previous company’s records.
If your car has remained uninsured for long periods, your new premiums may be higher than your previous provider’s. The reason is, a different insurance company could see you as a potential insurance risk.
Aside from a higher premium, you may not have access to several discounts. With so much to pay for, it could be damaging to get a policy after canceling outright.
Legal implications
Most states in the US mandate an insurance policy to ply their roads. If you get caught without a car policy cover, legal issues could weigh you down.
Mandatory requirements for an insurance policy is serious in America. In some states, drivers get penalized for driving to register their vehicles from home without a license. So, even if you’re licensed and whatnot, you’ve got to maintain your insurance policy no matter what.
Financial backlog
If you manage to come unscathed from a car crash involving your vehicle, it could mean trouble. Without an insurance policy, payment for repairs and bodily damage could run into tens of thousands of dollars.
And if you’re unemployed, where’s the money going to come from? Apart from the aforementioned reasons why it’s a bad idea to cancel your policy, this rings true the most.
So, if you’re thinking about dumping your insurance policies altogether, think again.
