Car insurance for unemployed drivers

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Car insurance isn’t cheap for anyone, but if you’re out of work it might seem impossibly expensive. This is because car insurance providers have for years seen unemployment as a sign of increased risk.

We look at why this is and give you tactics for cutting car insurance costs, so your car insurance is one less thing to worry about.

Can I get car insurance without a job?

You certainly can but it’s going to be much more expensive unfortunately. Potentially hundreds of pounds higher.

Before we get into why unemployed people are hit with higher fees and how you can get cheaper insurance, it’s worth saying that you shouldn’t list yourself as unemployed if you don’t have to.

In many cases people can avoid this major price hike by listing themselves more accurately. You might think you don’t have a job, but by listing yourself as a student, a retiree or a stay-at-home-parent you might well get a lower premium than simply putting unemployed.

How does being unemployed affect car insurance?

Car insurance companies take into account dozens of factors when working out your premium. Job status is one of them.

The Association for British Insurers (ABI) says that insurers view unemployment as an additional risk, and anyone not in a job is more likely to have an accident and make a claim. So being unemployed will raise your car insurance premium unfortunately. Here are reasons insurers give for doing so:

  • Travel more. Unemployed are more likely to drive around going to job interviews or running errands in the day. Given the more time you spend on the road the more likely you are to have an accident, insurance premiums will rise.
  • Driving outside comfort zone. You’re more likely to be driving in unknown areas in your search for work, which can increase the risk of an accident.
  • Distracted. Insurers think that unemployed drivers may not have optimum levels of concentration because of their circumstances, which again can make them more of a risk behind the wheel.
  • Less car maintenance. Insurance providers think that because the unemployed might have less cash they’re less likely to maintain their car, which could increase the likelihood of an accident.
  • Statistically higher risk. Whatever the reason, insurers often point to reports that show unemployed people are more likely to crash. Plus they say the long-term unemployed are more prone to making fraudulent claims.

How can I get cheaper car insurance as an unemployed driver?

All of this must be a bit of a kick in the teeth. Yet if you’re unemployed or even just looking to slash your premiums, there are several little tactics you can use to shrink your premiums as much as possible.

  • Telematics policy. Fitting your car with a black box or telematics app which measures your speed, distance travelled, and the time of day or night you’re driving can help lower your premiums. Or if you’re reckless it can raise them, so watch out.
  • Mileage. Drive less and use your black box to prove it. This might convince the insurer you’re not out on the road all that much and so are less of a risk.
  • Higher voluntary excess. Your excess is the amount you contribute to a claim before the insurance kicks in. Voluntarily accepting a higher excess can give you a lower premium, just make sure you can afford to pay it should you need to.
  • Pay it all upfront. Paying a lump sum each year is typically cheaper than paying for your policy monthly. Insurers tend to charge more and then put interest on any instalments too.
  • No claims discount. Drive responsibly, avoid making any claims, and after a few years your insurer should reward you with lower premiums.

Factors that affect car insurance premiums

As mentioned earlier, car insurance companies will use several factors to work out your overall premium.

Some are based on you; personal factors such as where you live, your vehicle, your age, your health and your recent driving record will play a part in your premium.

Quite unfairly, if there has been a jump in crime or car-related crime in your area your vehicle might be seen as a bigger risk. This is because if it’s stolen, you’ll claim.

However, there are external factors too. If your insurer has had a particularly expensive year due to there being lots of claims, it might look to offset the cost by raising premiums on all its customers.

Of course laws and any increase in the prices of car parts will change your policy too.

Frequently asked questions


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