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How Is Unemployment Affecting Your Car Insurance Rates

Unemployment has a deep impact on auto insurance prices. Car insurance companies pay close attention to the financial situation and credit rating of each applying candidate. Being unemployed brings higher auto insurance costs and a high-risk driver label. Find out how unemployment is affecting car insurance rates and get free insurance automobile quotes from our website.

@ car-on-openRecent studies show that jobless motorists are paying, on average, 30% more for their car insurance than those in employment.  Premiums for the unemployed can reach as much as 63% higher depending on factors such as postcode, and even the employment history of the applicant. The reason that insurance companies are raising policy prices for the out-of-work is because they perceive unemployed drivers as a greater risk than those who are in work. These policyholders will spend more time driving, searching for a new job, thus being more exposed to accidents. The unemployed are likely to be using their cars more during the day and may even be travelling on unfamiliar roads when attending interviews.  And a higher risk to accidents means that the company is more likely to have to deal with a claim and provide reimbursement.  So, the companies compensate by increasing the insurance costs.

Unemployed drivers will struggle to pay premiums in due time. Missed or late payments on debts, such as loans and credit cards, when you hit the kind of financial struggle that occurs from unemployment is also likely to have a negative impact on your credit rating. And, as insurers look at an applicant’s credit history when determining the cost of their policy, wrenching as it seems, this can also drive up the cost of premiums. Having a poor credit score is another reason why a driver can end up being considered high-risk.

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