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CAR INSURANCE FOR UNEMPLOYED DRIVERS

Compare quotes for unemployed drivers

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How much does car insurance for unemployed drivers cost?

Insurance companies use all sorts of information to calculate how much your premiums will be – and job title is a really important data point.

So when you apply for car insurance quote and set your job title to ‘unemployed’, the premiums you are offered will be more expensive. Why? Because insurers’ data suggests that the unemployed are more likely to get into accidents and less likely to look after their cars.

While this may feel unfair, especially if you are actively looking for a new job, there are things you can do. Changing your job title from ‘unemployed’ to ‘housewife’ or ‘retired’ for example will often shave money off your quote.

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How to lower your car insurance when you’re out of work

Insurers base the price they offer you on many different factors, of which employment status is only one. This means that even if you’re unemployed, there are plenty of ways you can pay less for car insurance:

  • 1

    Choose the right car

    Insurers split cars into 50 different pricing groups based on factors like engine size and repair costs

  • 2

    Simplify your cover

    Strip extras out from your policy, such as a courtesy car or legal expense insurance, where appropriate

  • 3

    Keep your mileage down

    The lower your annual mileage, the lower your premiums are going to be

  • 4

    Don’t modify your car

    Mods like spoilers, tinted windows and car hi-fis can drive up your premiums

  • 5

    Protect your no-claims bonus 

    Five years of driving without making a claim can save you as much as half of your entire quote

  • 6

    Renew at the right time

    The average motorist can save money if they renew their insurance policy a week before it ends

  • 7

    Improve your security

    Invest in an alarm, immobiliser or tracker, and park your car off the street overnight

  • 8

    Drive carefully

    If you drive with care and obey the law, there's less chance you'll get points on your license

Why compare unemployed drivers car insurance with moneysupermarket

Find cheap car insurance quotes for unemployed drivers with MoneySuperMarket

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Sara Newell

Our expert says

Car insurance can be lot more expensive if you don't have a job. Insurers tend to view the unemployed as a bigger risk and therefore push up premium prices.Thankfully there are things you can do to help keep the cost down - especially if you reduce your mileage.

- Sara Newell, Car & Van Insurance Expert

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Insurers tend to charge unemployed people more for car insurance because they believe unemployed drivers are more likely to make a claim. There are several reasons for this:

  • Unemployed people are likely to drive more if they use their cars to look for work, which increases the risk of an accident occurring

  • If you’re unemployed, you’re also more likely to be driving on roads you’re not familiar with, which also increases the risk of accident

  • Insurers believe that unemployed drivers may be more distracted because of their circumstances, and may drive less carefully

  • Unemployed individuals may also be viewed by insurers as less likely to maintain their vehicles, as they have less spare cash

  • Unemployed people tend to pose a higher credit risk

Car insurance is a legal requirement for drivers in the UK, thanks to the continuous insurance enforcement rules brought in as part of the road safety act of 2006. This means that unless your car is registered as off the road with a SORN, or in the process of being bought or sold, you could be faced with a fine for not insuring your vehicle.

There are three main types of car insurance:

  • Third-party only: This covers the cost of repairs to another person’s car if you cause an accident. It is the most expensive and least comprehensive type of policy

  • Third-party, fire and theft: This covers repairs to other people’s cars, as well as fire or theft that affects your own vehicle

  • Fully comprehensive: The best level of cover you can get – and these days the cheapest. Fully comprehensive car insurance protects you, your car and other motorists from damage. It also covers medical expenses, repairs, fire damage and theft of your vehicle

You’re likely to get a better deal on your car insurance policy if you pay an annual lump sum rather than in monthly instalments. This is largely because in a way monthly payments are similar to taking out credit – you’ll be covered in full, but without having paid the full amount yet.

Paying monthly can be useful as you’ll be able to spread the cost out, but you will end up paying a little extra overall.

Excess payments refer to the cost of making a claim – it’s essentially how much you’ll need to put towards the total claim cost before your insurer pays the rest. Volunteering a higher excess fee on top of the compulsory amount indicates to insurers you won’t bother making small and frivolous claims.

A no-claims bonus is what you earn when you go some time without claiming on your policy. The longer you’ve gone without claiming, the more your insurers will knock off your premiums as they’ll see you as less likely to make further claims in the future.

You might consider not claiming for an accident if the damage done to your car is minor and it would be more sensible to pay for the repairs yourself – let’s say the excess you’d need to pay was more than the overall repair costs. This way you’ll preserve your no-claims bonus as well as being better off financially.

If you’re involved in an accident and you decide not to make a claim, you should still inform your insurer. They’ll keep their records up to date, so they know what condition your vehicle is in and whether this will affect your likeliness of claiming in the future.

If you don’t keep your insurer updated, it’s possible this will void your insurance policy so you won’t be able to claim when you really need to.

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