How Is Unemployment Affecting Your Car Insurance Rates

Having no job severely limits the financial possibilities of any persons. This includes the capacity of paying for car insurance. It is a vicious circle in which being unemployed may cause you to pay more. Furthermore, being unemployed also influences the rates of the drivers in your area.  We will discuss this in detail immediately.  Meanwhile, if you are unemployed and you want to keep a policy active, by either switching to another carrier or dropping additional coverage, we recommend you to get free online auto insurance quotes before making any decision.

car-insurance-cost-jpg-838x0_q67_crop-smartAs we just mentioned, there is a vicious circle:  being unemployed may cost you more money on car insurance. There are some reasons cited by various companies, but generally, they consider you riskier to insure. For example, many companies consider that being unemployed allows you to drive more during the day on unfamiliar roads, for potential hire interviews. And driving more exposes you more to accidents – and thus, being a higher risk.

Missed or late payments on debts, such as loans and credit cards, caused by unemployment will also have negative impacts on your credit rating. And, as insurers look at an applicant’s credit history when determining the cost of their policy, this will drive up the cost of premiums. Unemployed drivers are also regarded by insurers as less likely to maintain their vehicles, as they will have less spare cash to spend keeping their car in top-notch condition.

Insurance companies also take into consideration the psychological factor. When you are driving on unfamiliar roads, trying to get a job, it is likely to be stressed and driving while being stressed is a serious danger.

A higher number of unemployed drivers in the area makes rates more expensive. The increased density of unemployed persons is likely to cause an increased in uninsured and underinsured motorist, a thing that influences the overall insurance cost for the neighborhood.

Check our webpage for more info. Read more!