Car Payment Insurance Plans For Unemployed

First the questions is, Can you get car insurance if you’re unemployed? The answer is YES, however you might have to pay more in car insurance premium by almost 30% when compared to someone who is working. Insurance companies understand the risk involved in providing car insurance to unemployed individuals hence the costs are high. From a consumer perspective it might sound funny, because you are not earning and to make things difficult you’re asked to pay more. That’s why insurance is a business. Even if you are working and still apprehensive of buying a new car coz the job world looks very unstable, would compel you to think about car payment protection plans which are offered by some car manufacturers for free. One option is that if you loose your job in a scenario where you qualify for your state unemployed compensation program, your monthly payments will be made for a specific period of time (months) and a fixed amount is paid. Having said that, if your payment is reduced due to economic downturn and as a result you cannot afford to make your car insurance payments then this option is not applicable to you. Let’s get into the details now:


Why Are You Paying More For Car Insurance When Not Working?

Now, obviously no insurance company can charge you extra money without giving a justifiable reason for doing so. Some of them are:

  • Unemployed individuals are always tempted to apply for inappropriate claims. Reason being, they have scarcity of cash flow.
  • As an unemployed individual, you would traveling a lot more for interviews. Hence using your car and chances of being involved in an accident. On the contrary, one can also claim that as I don’t have a job I don’t need to travel to work so the risk will be minimum. You are correct, but in the end it’s the car insurance company’s decision to decide on this.
  • Being unemployed, mentally you are stressed and absent mindedness can lead to accident while driving.
  • When you are not working, it will be difficult for you to maintain your car in perfect driving conditions on road.

How Does A Car Payment Protection Plan Work?

When you purchase a new car, then car payment protection plan has to be purchased within a specific period of time. If you loose your job within 1 or 2 years of purchasing your new car, then the dealer, from where you purchased your vehicle, would pay your monthly car insurance premium for 6 months or may be more as per the terms and conditions specified in the payment protection plan.

Who Should Consider Buying A Car Payment Protection Plan?

  1. You have decided to buy a new car, however in the current job market you fear losing your job. In such cases car payment protection plan can be of great help in providing temporary cover.
  2. You are sure to get a job after losing it, within the time frame set by your car dealer and before he stops paying on your car insurance premium.

Is This The Feeling When You Loose Your Job?

What Are The Options Apart From Opting For Car Payment Protection Plan?

  • If you own an old car and have lost your job recently then you can opt for only collision coverage. Also, choosing a high deductible amount also can lower your on going monthly premium. It might not sound quite right, but choosing a high deductible may be the need of the hour and an ad hock solution.
  • If you loose your job, it is your rightful duty to inform your insurance provider about your “change in circumstances” and they will decide if they can decrease your premium or not. Whatever the decision may be, rest assured that your car insurance policy will not be cancelled.
  • I am not very sure but many people from their practical experience say that it’s an easy excuse. If you can just say that you have taken early retirement due to personal reasons rather than showing that you lost your job. May be it will work for you to get an auto insurance cover when unemployed.
  • You can also read our other article Who Has The Cheapest Car Insurance for information on reducing car insurance cost. This is also applicable to unemployed professionals as well.
  • A lot of insurance companies work on a business model wherein the most competitive prices are kept for acquiring new customer’s and build their long term business. What does this mean?. Well, it might be good option to switch your auto insurance provider and you may get in at a cheaper rate.

Although we have discussed, how you can go about securing your car insurance payments through payment protection plans, however the best advice which can be given is that it is NOT a wise idea to purchase a new car if you are uncertain about your finances in the near future. Wait and analyze your situation before you opt for such deals coz they only bring temporary solution.

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