How to save on insurance if you are unemployed

One of the biggest expenses American families face is car insurance. This is an unavoidable expense because it is illegal not to have car insurance if you are a car owner. All of this usually isn’t a problem if you have a job. But if you have been laid off or are out of work, auto insurance can be a difficult cost to cover on a family’s budget. That is why we have devoted this article to helping Americans save money on insurance and answer their most common questions.

If I was laid off, can my insurance rates increase while I am out of work?

The short answer is no, they will not. Insurance providers do not change rates on individuals whose work status changes. You will not be penalized for taking unemployment insurance either. Insurance providers also do not verify your employment status or require your paystubs.

What does matter when it comes to your insurance rate are things like what car you drive, where you live, what your age is, and if you have been in any accidents. Depending on what state you live in, insurance providers are allowed to check your credit score. Therefore, although you are not penalized for being unemployed, if you don’t pay your bills and debts, you can be. The lower the credit score, the higher the insurance premium.

Ways to Save

Drive safer

We already know that the rate you pay on your insurance depends on how many previous accidents you have been in. This includes if you have received any tickets for speeding or other infractions. The riskier you drive, the higher your rate will be. So, the safer you drive, the more you save. You also run less of a risk of getting into an accident or getting a ticket. Don’t speed and drive carefully!

Tracking devices

Typically, the only way an insurance company knows how safe or risky you drive is by looking at your driving record. However, these records don’t tell everything about a driver. That is why a company can choose to track how a driver drives with a device installed in the car or by using the driver’s cell phone. These devices track things like how fast you accelerate, brake, turn, and what time of day or night you drive. Pulling all of that data together gives them a pretty good idea of how safe of a driver you are. The safer you are, the better rate you get. The riskier you are, the worse rate you get.

Not all companies require drivers to have a tracking device. However, you can volunteer to have one installed. It can be used to save money if you intend to show off how safe you drive. Just make sure you do drive incredibly safe if you get one installed, otherwise it could work against you and increase your costs. Most insurance companies offer tracking devices so reach out to yours and see if you qualify for savings!

Reduce Your Mileage Estimate

Another factor that determines your insurance rate is the number of miles the insurance company expects you to drive every year. If you have lost your job and aren’t commuting or driving around as much, then you should adjust that estimate. For example, if at the beginning of the year you were estimated to drive 10,000 miles in a year, and now you believe you will only drive less than 5,000, that will cut your monthly cost of insurance. That is basically like your insurance company having to cover you for half of the exposure they originally planned on. That means they will charge you less for their coverage.

Increase your Deductible but Reduce Your Premium

There are always varying levels of coverage you can pay for. Plans that cover your liability to higher dollar amount or ones that pay for a new replacement car are more expensive. But they have lower deductibles that you have to pay if something happens. While insurance plans that have less coverage are cheaper on your monthly payment, they have a more expensive deductible. If you are open to taking on a little more risk, check out altering your plan so you have a cheaper monthly rate. If something were to happen and you got into an accident, then you would have to pay a high deductible, but you would be able to drop your monthly costs considerably.

Combine Policies

To encourage customers to carry their car, home, life, and other insurances with them, insurance providers offer bundled discounts for carrying all of the different policies. If you have multiple policies with multiple providers, check with them to see what kind of savings you could qualify for by combining them or putting them all with one provider. Insurance companies make money by selling you more plans and coverages so don’t be afraid to negotiate with them and see just how much money you can save. You could also commit to a longer coverage period or pay upfront for premiums instead of having a monthly payment. There are a lot of ways you can work with the companies to get a discount.

Compare rates

Insurance companies don’t like losing customers. If you might be looking to bundle your plans, shop insurance providers against themselves. Openly tell the companies that you are getting quotes and rates from other providers and they will try to earn your business. They compete aggressively against one another and this plays to your advantage.

It is also a good learning experience to see what different coverages and plans are out there. Some plans will be more suitable for your family’s needs than others. Keep in mind that it is not just about the monthly cost. Depending on the coverage you have you could end up paying much more if you make a claim. You have to make sure you don’t just go with the cheapest possible option but the one that is practical and safe from potential future losses.