Q

Q

Should I tell my car insurance company if I get laid off?

A

A

You don’t necessarily have to tell your insurance company if you get laid off, but if you can’t afford your premiums you should talk to your insurer about discounts, reducing coverage, or financial hardship options.

Kara McGinley

Kara McGinley

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.

In this article:

What to ask your insurance company if you get laid off

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.

  • Should I reduce my coverage limits?: Your coverage limit is the maximum amount your insurance company will pay you out for a covered claim. The higher you set your coverage limits the more expensive your premiums will be because you are paying for more protection. If you reduce your coverage limits the cost of your premiums will decrease, but you are also less protected if you get in an accident. At the very least, you can lower your policy to only your state minimums.
  • Can I raise my deductible?: Comprehensive and collision coverage require deductibles, which is the amount of money you pay out of pocket before your coverage kicks in. The higher your deductible is the lower your premiums are. If you raise the price of your deductible your car insurance will be cheaper, but you will have to pay more out of pocket when you file a claim.
  • Am I eligible for discounts?: Car insurance companies offer a variety of discounts. You can get a discount for being a safe driver and for not driving often. You can also get a discount for completing a driver’s education course or being a good student. Insurance companies will also give you a discount for having a good credit score, installing safety features in your car, and for customer loyalty. Learn more about the different types of car insurance discounts.
  • Do you offer usage-based discount programs?: Usage-based car insurance discounts can lower your premiums by monitoring your driving. Not all insurance companies offer these programs, so you should check to see if yours does. Your insurer will install a plug-in or use a mobile app to track your driving habits. You can choose a pay-as-you-drive program or a pay-per-mile program. If you are a safe driver or don’t drive often, these programs will result in significant discounts.

Can a car insurance company deny me coverage if I am unemployed?

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.

State-run car insurance

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.

Company car insurance

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.

Car insurance and COVID-19

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:

  • Paybacks on a percentage of monthly premiums
  • Payment extensions
  • Holds on policy terminations due to nonpayment
  • A flat rate refund for policyholders
  • Decreased insurance rates

Learn how the coronavirus outbreak is affecting car insurance.

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What factors affect the price of car insurance premiums?

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 TypeWhat It Does
Bodily injury liabilityThe part of your liability coverage that pays for medical bills if you've injured someone in an accident
Property damage liabilityThe other part of liability coverage, covers the cost of property damage you've caused in an accident
Personal injury protectionCovers medical expenses for you or your passengers after an accident
Uninsured/underinsured motoristCovers the costs if you're in an accident caused by a driver with little or no car insurance
ComprehensiveCovers damage to your car that happens when you're not driving
CollisionCovers 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:

  • Your driving history
  • The make and model of your vehicle
  • Your credit score
  • Your claims history
  • Your age and location
  • The deductible amounts you choose

Learn more about car insurance premiums.

How to contact your car insurance company

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.

  • Your policy number
  • Your policy duration period
  • The names of drivers in your household
  • Vehicle information
Insurance Editor

Kara McGinley

Insurance Editor

Kara McGinley is an Insurance Editor at Policygenius. She previously worked as a freelance writer and a copywriter for various startups. Her work can be found in Teen Vogue, The Culture Crush, Mask Magazine, and more.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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