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Why does car insurance go up if you are unemployed?

Car insurance companies base your rates on many factors, with one of them being your credit report.

As long as you are working and earning a weekly paycheck, your bills probably stand a good chance of being paid on time and you will continue to be able to put money in the bank for savings. The minute you become unemployed and your unemployment starts to become extended, the better the chances are that you will start to let some of your bills slide.

Your car insurance premium could be one of the things that you decide that you can no longer afford.

No matter what else you do, do not neglect to pay your car insurance.

History has told the car insurance company’s underwriters that unemployed individuals are more likely to skip or pay their car insurance bill late. When you are late paying your car insurance, you stand a good chance of having that policy lapse and if you do not pay it within a time limit set by your insurance company, you stand the risk of becoming uninsured.

If you are not carrying insurance, in some states, your insurance company will notify the Department of Motor Vehicles of your lack of insurance, which can result in the suspension of your driver’s license and registration.

If your coverage lapses, you will need to talk to your car insurance company immediately and work to get your policy re-instated. You may be charged higher rates since your policy lapsed and the company is now able to raise your rates.

You might take a moment to check and compare auto insurance quotes at this time. Remember, all your auto insurance comparison quotes will be a little higher when you do not have insurance as opposed to when you are carrying car insurance.

If you become unemployed, you might want to talk to your car insurance company and let them know. They may not raise your rates right away and you may end up being able to save money on your car insurance if you are no longer driving as many miles as you were when you were working.

If you do find your rates going up, you should take the time to compare auto insurance quotes to make sure that you are getting the best deal on your car insurance.