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Unemployment and Car Insurance Q&A

With more and more people losing their jobs across North America, many people are finding themselves in financial predicaments that affect their health, home, family, and even their car insurance.  Here are some basic questions and answers regarding car insurance for people who recently became unemployed. 

Does losing your job mean losing your car insurance?

Well, the simple answer is No. You will not lose your car insurance if you suddenly find yourself unemployed. Online car insurance companies and traditional insurance companies do not cancel your insurance if you lose your job. Their main concern is that you pay your premium. If you keep up to date on your premium payments you will retain your car insurance.

Do I need to notify my car insurance company if I lose my job?

Traditional and online car insurance companies legally do not need to be notified if you lose your job. Again, as long as you pay the car insurance premiums, you will keep your car insurance. However, some car insurance companies will adjust your premium if you lose you job. No, they won't lower the premium out of the goodness of their heart, they will likely increase your car insurance premium because you are now more of a "risk."

Why did my insurance premium go up?

Some, not all, car insurance companies will raise your premium if you lose your job. Why? Because all car insurance rates are based on risk. So if you lose your job, you will likely be on the road more often, running errands, dropping off resumes, or other activities, meaning you will be an increased risk. Therefore your car insurance premium goes up. If you are still employed, you may see your car insurance premium rise due to the increasing unemployment numbers. Many people are not able to pay their premiums and drop their insurance. Consequently, to cover their business losses, a car insurance company may raise premiums across the board on all customers.

Can I lower my car insurance premium now that I'm unemployed?

Traditional and online car insurance companies will not lower your premium due to unemployment. However, you can lower your premiums a couple of different ways. The first would be to review your policy and the laws of your state. If you are carrying Comprehensive coverage or Full coverage, you may want to downgrade to simple Liability coverage. Carry only the level of insurance that is required by the law of your state. A second way to reduce your premium is to search  for cheap car insurance online. Use portal sites to compare rates from a number of different companies so you get the cheapest car insurance possible, without compromising coverage. There are many nationwide online car insurance companies that offer quality coverage at a lower rate than your local car insurance agent.

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