Car Insurance for Unemployed Drivers: What to Know
Most insurers don’t ask about employment status, but unemployed drivers may face higher premiums if they fail to make on-time premium payments.
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Written byAmy Beardsley
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Amy specializes in insurance and technology writing and has a talent for transforming complex topics into easy-to-understand stories.
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Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
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Data reviewed byKonstantin Halachev
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7+ years experience in data analysis
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Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
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Table of contents
Unless you have poor credit or don’t make your premium payments on time, your unemployment shouldn’t meaningfully influence how much you pay for car insurance. Navigating unemployment is hard enough without having to worry about expensive car insurance costs.
Here’s how to find the cheapest car insurance companies as an unemployed driver.
Quick Facts
Factors that influence car insurance costs include your location, vehicle usage, car type, and driving record.
Car insurance isn’t tax deductible for unemployed people.
Drivers in 48 states must purchase a minimum amount of car insurance.
Do your car insurance rates increase when you’re unemployed?
Your employment status doesn’t affect your rates, but the circumstances around unemployment could lead to higher premiums. For example, not having a job typically makes it harder to submit on-time payments for insurance premiums, credit cards, and more. Making late payments or having poor credit can result in higher average premiums.
If you’re unemployed, but make on-time payments and have no credit issues, you shouldn’t face higher insurance costs.
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Factors that affect car insurance rates
To better understand how your job affects auto insurance prices, it helps to know what insurers look for when giving you a quote. The National Association of Auto Insurance Commissioners (NAIC) and the Insurance Information Institute (III) list several factors that influence your rates, including:[1]
Location: Traffic patterns, crime rates, and risk of natural disasters in your ZIP code can all affect rates.
Personal details: This includes your age, marital status, employment, homeownership status, credit score, and other personal information.
Usage: Insurers typically want to know your annual mileage and daily commute.
Driving record: Accidents, DUIs, and other traffic violations you’ve had while driving can increase rates.
Vehicle type: Safety features, replacement and repair costs, and the theft risk of your car can all influence your rates.
You’ll notice that employment status didn’t make the list. Though losing your job won’t change your costs right away, it can indirectly influence your costs later on or lead to higher premiums for a new car insurance policy if you shop around while unemployed.
For Example:
Your car’s primary purpose will likely change from “commute” to “pleasure,” and you might drive less, which can lead to lower premiums. But you may also lose any employment-related discounts. And if you struggle to pay your bill and let your car insurance policy lapse, you may pay more when trying to get coverage in the future.
Cheapest car insurance for unemployed drivers
If you’re looking to lower your auto insurance rate, you should explore working with an auto insurance company known for offering low premiums. Luckily, you have many options to choose from, no matter where you live.
Insurify’s data team reviewed hundreds of quotes for drivers across the country to determine which companies are offering the lowest rates. Below is a list of top companies offering the lowest average monthly car insurance premiums, nationwide.
The below rates are estimated rates current as of: Thursday, May 1 at 12:00 PM PDT.
Data reviewed by Konstantin Halachev
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
Insurance Company  | Full Coverage | Liability Only |
|---|---|---|
| COUNTRY Financial | $36 | $16 |
| NJM | $54 | $34 |
| Auto-Owners | $68 | $32 |
| Mile Auto | $89 | $55 |
| Erie | $94 | $56 |
| USAA | $98 | $47 |
| State Farm | $117 | $55 |
| Root | $120 | $70 |
| CSAA | $128 | $82 |
| Allstate | $130 | $61 |
| American Family | $150 | $70 |
| Safeco | $150 | $90 |
| Progressive | $154 | $101 |
| Mercury | $161 | $88 |
| The Hartford | $172 | $105 |
| GEICO | $178 | $148 |
| Direct Auto | $178 | $95 |
| Nationwide | $179 | $86 |
| National General | $184 | $99 |
| Travelers | $189 | $91 |
| Clearcover | $189 | $122 |
| Elephant | $200 | $135 |
| The General | $208 | $107 |
| State Auto | $212 | $106 |
| Shelter | $213 | $124 |
| 21st Century | $227 | $112 |
| Chubb | $229 | $114 |
| Farmers | $229 | $108 |
| Bristol West | $233 | $111 |
| Infinity | $239 | $164 |
| Liberty Mutual | $247 | $173 |
| Commonwealth Casualty | $264 | $101 |
| AssuranceAmerica | $265 | $146 |
| Dairyland | $266 | $97 |
| GAINSCO | $270 | $124 |
| Amica | $284 | $174 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
How unemployed drivers can get cheap car insurance
Being unemployed presents a number of challenges. The last thing you need is to struggle to find affordable auto insurance. Here’s what to do to find the right coverage without overpaying.[2]
1. Compare car insurance quotes
Your first step is to see what’s available. Make it a priority to shop around and get quotes from a few different companies.
If insurers ask about your employment status or job title, you should answer honestly. Not every insurance company will weigh employment the same, and some insurers don’t factor in your employment status or job title at all.
2. Find discounts
When looking for policies, it’s essential to ask about any potential discounts or offers that might apply to you. Insurance companies often offer discounts to customers who bundle multiple policies with one company or have a track record of safe driving. You might also earn a discount for low mileage or opting for paperless billing.
Every penny saved counts and can help you manage your financial situation more efficiently, especially when you’ve lost your primary source of income.
3. Consider pay-as-you-go insurance
If you’re driving less because you’re no longer commuting to and from work, look into pay-per-mile insurance coverage. Usage-based car insurance companies like Hugo calculate premiums according to your annual mileage. It’s a great way to avoid higher rates if you don’t have a daily commute or have more sporadic and less predictable driving patterns.
4. Maintain a clean driving record
Your driving history reflects your behavior on the road, including any past accidents, speeding tickets, or other traffic violations. Insurers weigh this factor carefully when determining your car insurance premium. Generally, the fewer accidents or violations you have, the lower your risk and the less you pay for coverage. Drivers with a clean record earn low rates.
5. Lower coverage and raise deductible
Insurance coverage needs can change according to the age and condition of your vehicle. If you have an older vehicle, the car’s value might not justify the cost of full-coverage auto insurance. If you determine you no longer need comprehensive or collision insurance, you’ll see a notable drop in your auto insurance rates.
Another option is to raise your deductible, which is the amount you commit to pay up front if you file a claim. A higher deductible usually leads to lower rates. Remember that you’ll need to have the cash on hand to cover that amount if you need to file a claim.
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Is there relief for unemployed drivers?
If money is tight, you can start by asking your insurance company if it offers a grace period. In some states, auto insurance laws may require insurers to provide an extension of seven, 10, or 31 days to make premium payments. If your state doesn’t mandate a grace period, you can contact your insurance company or agent to see if your policy allows any payment flexibility.
If you’re worried about keeping up with car payments, contact your lender. They may let you adjust your due date, skip a payment or two, or make interest-only monthly payments to give you some breathing room. It’s also a good time to look at your budget to see if you have to adjust your spending anywhere else.
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Unemployed car insurance FAQs
Navigating car insurance while unemployed can lead to questions and concerns you may not have thought about before. The following information should provide you with some clarity.
Is car insurance tax deductible for unemployed drivers?
No. Car insurance isn’t tax deductible for people on unemployment. It’s tax deductible for some self-employed people, qualified performing artists, and army reservists. If you’re unsure if you can deduct your insurance payments, speak to a tax professional.
What is the cheapest car insurance company?
The car insurance company with the lowest rates depends on your situation, though COUNTRY Financial and Auto-Owners typically have some of the cheapest rates overall.
Rates vary between insurers, and the cheapest one for you might not be the cheapest for someone else. Your best option is to shop around and get multiple quotes. When you compare coverage options and car insurance costs, you can be sure you’re getting the most competitive rate.
Do drivers legally need to buy car insurance?
Yes. Most states have laws that require drivers to carry a minimum amount of car insurance. Each state can have different coverage requirements, but you generally need liability insurance that covers bodily injury and property damage. If you aren’t sure, ask your insurance agent or check your local laws to know exactly what coverage you must have.
How can you apply for car insurance if you’re unemployed?
Applying for car insurance while unemployed isn’t much different from any other time. Start by getting quotes from several insurance companies. When answering the questions, be honest about your employment status. Remember that not all insurers will ask about it, and those that do might not use it as a major factor in your rate.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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Sources
- National Association of Auto Insurance Commissioners. "Auto Insurance."
- Insurance Information Institute. "How to save money on car insurance."
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Amy BeardsleyInsurance Writer
Amy is a personal finance and technology writer. With a background in the legal field and a bachelor's degree from Ferris State University, she has a talent for transforming complex topics into content that’s easy to understand. Connect with Amy on LinkedIn.
Amy has been a contributor at Insurify since September 2023.
Licensed auto and home insurance agent
3+ years experience in insurance and personal finance editing
NPN: 20564519
Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.
Featured in
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.