Car Insurance for the Unemployed

Problems Faced by Unemployed Drivers

It’s an unfortunate fact that insurance companies often charge more to unemployed drivers.

Research by the BBC found that on average, car insurance for those without a job and thus with more leisure time was 30% higher than those in full-time work. In one example, it was as much as 60% higher.

From the insurance company's perspective, they argue that leisured drivers are more prone to causing accidents and also more likely to submit a claim, making them a far higher risk.

Some other reasons that are given by insurers for the high costs of premiums for the unemployed include:

  • The unemployed often drive to attend interviews – resulting in more time on the road, and thus more accidents.
  • The locations they travel to (for interviews, again) are likely to be unknown places, making them more likely to have an accent than they would in more familiar places.
  • With less available funds, the unemployed spend less money maintaining their cars, making them more likely to have an issue on the road.
  • Someone who has been unemployed for a prolonged period is more likely to attempt a fraudulent claim.
  • Worrying about work and finances may distract them while driving.

Some of these points that have come from insurers are deeply argumentative, especially one which depicts the unemployed as potential criminals.

Nonetheless, statistics do prove that leisured people do submit more claims than their working contemporaries and thus the discrimination in costs seems somewhat justified.

Tips to Reduce Car Insurance Costs

The most valuable tip is to compare insurance quotes and not just accept the first quote you are given.

Other tips include:

Reduce your mileage

Greater mileage means more time on the road and, consequently, a higher risk and higher premiums.

Try to remain within your mileage limit, as passing beyond it can mean you are not insured if an accident occured.

If you are close to the limit, contact your insurance company to discuss raising it with them.

Declutter your cover

Drop any unnecessary extras, such as legal expenses cover or a courtesy car, and concentrate on just being legal.

Moving from fully comprehensive to third-party insurance could save you a substantial amount. Just make sure it is always the best type of cover for you - getting a cheaper insurance policy may not cover you for what you want.

Look at black box insurance

By having a black box fitted to your car which sends data to the insurance company, you can help gain trust and lower your risk – resulting in cheaper costs.

Change your car

It doesn’t matter if you are employed or not, your car is likely an essential you cannot do without, but do you actually need the type of car you are driving?

Changing your car to one from a cheaper insurance group can save you money every year, even hundreds of pounds if the change is a big one.

There’s no need to be driving around in a luxury Lexus if you are no longer employed, and cutting back here can help get you through the month and take a chunk from your insurance with no real loss in mobility.

Increase your excess

By voluntarily adding to your excess amount, you move more of the risk from the insurance company to yourself.

Remember, the excess is the amount you have to personally cover before the insurance company will pay a penny, so don’t fix it so high that an accident becomes financially devastating, but your premiums will lower with a higher excess.

Keep searching for a better deal

While you are focussed on getting a job, it is easy to let other things slide, including remaining with your current insurer because switching is too much time.

However, if you keep an eye on your insurance costs you may be able to save yourself money by switching providers at an appropriate time.

Improve your security

If you can afford it, invest in improved alarm systems and an immobiliser for your car. Also, try to make sure it is parked in the safest place possible (and let the insurance company know) to lower its risk level overnight.

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