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Published April 21, 2020
KEY TAKEAWAYS
You do not have to tell your car insurance company if you get laid off, but if you can no longer afford your premiums you should ask them about ways to lower your rates, like through discounts or reducing coverage
Your insurance company does not use employment status to calculate your quote and they cannot deny you coverage just because you’re unemployed
You can contact your insurance company over the phone, through their website, or through a mobile app
Auto insurance is financial protection in case you get into a car accident and damage someone else’s vehicle or injure them. It can also protect you if your car is stolen, damaged in an accident, or by a different covered peril, like falling objects, lighting strikes, or fire.
When you purchase an auto insurance policy you will be asked to provide information about yourself and your vehicle, like how old you are, your credit score, and the make and model of your car. You won’t be asked to provide any documentation about your employment status when you purchase your policy. That said, it’s a good idea to know your budget when you are shopping around for quotes, so you can find an affordable policy.
If you get laid off and can no longer afford your car insurance payments, don’t panic. There are steps you can take to make your car insurance more affordable. You don’t have to tell your insurance company if you get laid off, but you should contact them if you can no longer afford your car insurance premium. Depending on the circumstances, your car insurance company may have financial hardship options.
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If you get laid off and can still afford your car insurance, you don’t necessarily need to contact your insurance company. That said, if you can no longer afford your insurance you should contact your insurance company to talk about how to lower your rates.
Below are some questions you should ask that could result in cheaper insurance premiums.
No, a car insurance company cannot deny you coverage because you are unemployed or because you’ve filed for unemployment. Your insurance company will not ask you about your employment, unemployment, or employment history when they are calculating your premiums. They may review your credit score and related information to judge your ability to pay your premiums on time.
Depending on what state you live in, you might qualify for state-subsidized car insurance. In order to qualify for these programs you will need to meet certain requirements, like being currently enrolled in Medicaid or being under a certain income level. These requirements will vary from state to state and not every state will even offer this type of car insurance. However, several states do, including California and New Jersey.
If you were laid off from a job where you had a company car, your company is most likely going to take that car back. When you get laid off, you lose all employee benefits, including things like health insurance. If your car was insured through your company, then your employer will have to contact the insurance company to get your name removed from the policy.
If you’ve recently lost your job because of the COVID-19 pandemic, many insurance companies are offering some form of financial assistance. Major car insurance companies have responded in the following ways:
Learn how the coronavirus outbreak is affecting car insurance.
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Car insurance is made up of different types of coverage and each type offers a different kind of protection. When you purchase a policy, you set coverage limits for each coverage component — the higher you set your limits, the more expensive your coverage will be.Below are the coverage components that make up what is called a “full coverage” auto policy:
Coverage Type | What It Does |
---|---|
Bodily injury liability | The part of your liability coverage that pays for medical bills if you've injured someone in an accident |
Property damage liability | The other part of liability coverage, covers the cost of property damage you've caused in an accident |
Personal injury protection | Covers medical expenses for you or your passengers after an accident |
Uninsured/underinsured motorist | Covers the costs if you're in an accident caused by a driver with little or no car insurance |
Comprehensive | Covers damage to your car that happens when you're not driving |
Collision | Covers damage to your car after a car accident, no matter who was at fault |
The amount of coverage you choose will affect the price of your rates. Insurance companies also factor in a variety of additional information when calculating the cost of your car insurance, than can include:
Learn more about car insurance premiums.
You can contact your car insurance company over the phone, online, or through a mobile app (depending on your insurer). Most insurance companies will have different phone numbers for you to call depending on the reason for your call. For example, most major insurance companies have separate phone lines to call if you get into a car accident, need roadside assistance, or have a customer service question.
Before contacting your insurance company, you should have a few details handy that will make the process quicker.
Kara McGinley
Property and Casualty Insurance Expert
Expertise
Kara McGinley is an insurance editor at Policygenius, specializing in home, auto and renters insurance. She previously worked as a freelance writer and copywriter, and has been writing about insurance since 2019. Kara is an expert at making complicated topics like property insurance simple to understand. Her work can be found in Teen Vogue, The Culture Crush, and more.
Education
Kara has a B.A. in English from East Carolina University.
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