Car Insurance for Unemployed Drivers

Why is unemployed driver insurance so expensive?


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By Cai Bradley

on Monday 14 October 2019


View out of a rainy car windscreen in traffic

Car insurance is legally required in the UK and all drivers must have cover in place, irrespective of their job title, wage, or anything else for that matter.

It doesn’t come cheap for anyone but, unfortunately, car insurance for unemployed drivers is notoriously expensive at a time when they’re least likely to have the funds to afford it. Although it may seem unfair, car insurance providers have various reasons for this trend and always justify their premium prices with statistics from previous claims.

In this guide, we explain the average cost of car insurance for unemployed drivers and how you can cut the cost of your cover with a few simple tips.

Car insurance cost for unemployed drivers

Do car insurance companies check employment? Some people don’t realise it, but insurance providers often check a driver’s employment and it certainly has an impact on the cost of premiums. 

It’s no secret that unemployed drivers’ car insurance is more expensive than most other groups of people, as outlined in our full guide to the most expensive and cheapest jobs for car insurance.

In fact, a recent study done by the BBC found that car insurance for unemployed drivers was, on average, 30% more than what others paid. There were even some cases where those out of work had to pay a staggering 63% more for their car insurance than those in full-time employment.

Of course, there are ways for unemployed people to get cheaper car insurance, as we’ll outline later in this article, but what are the reasons behind the more expensive cover?

Why is car insurance so expensive for unemployed drivers?

Providers calculate car insurance with a few factors in mind, including:

  • Age of the driver

  • Driver’s address

  • Previous driving convictions

  • Make and model of the car

  • Driver’s job status

The Association of British Insurers (ABI) claims that, by using the above data and statistics from many years of claims, insurers are able to prove that unemployed drivers pose a higher risk than others.

But what are the reasons for this?

Travelling in search of work. Insurers claim that unemployed drivers use their car frequently in order to seek job opportunities, attend interviews, and so on. Statistics show that the more you drive, the higher risk you are of being in an accident, which therefore makes unemployed drivers a higher risk to insure as they travel so often.

Using unfamiliar roads. Because unemployed drivers are more likely to use roads that they are unaccustomed to in order to find the location of job interviews, statistics suggest that they have more chance of being involved in an accident.

A lack of cash. Some car insurance companies will also see unemployed people as a risk because they typically have less cash to use for vehicle maintenance, increasing the risk of breakdowns and mechanical issues.

Likelihood of claiming. Industry figures suggest that long-term unemployed drivers are more likely to make a claim than those who work full-time. According to insurers, there’s also an increased likelihood of long-term unemployed drivers making a dishonest, fraudulent claim.

Some of these reasons are massive generalisations from the insurers and will probably not apply to the majority of unemployed people in the UK, but because the insurance providers can back their claims with statistical data from previous claims, it’s difficult to argue with.

Car insurance unemployed or retired?

If you are in a situation where you are able to make a choice between being listed as ‘unemployed’ or ‘retired’ on your car insurance application, it’s almost certain that you will get a better deal if you choose the latter title.

As mentioned in our guide to the best jobs for car insurance, being a retiree is one of the cheapest occupations for cover, while unemployed people are usually hit with higher premiums.

Of course, ensure that you tell the truth and don’t list yourself as ‘retired’ if you don’t qualify as such. Doing so is considered fraud and will likely lead to your cover being void or invalid.

Don’t list yourself as ‘unemployed’ if you are ‘retired’!

Remember, if your car insurance occupation is unemployed but you are not yet retired, there are still many ways you can reduce the cost of your cover.

Cheap car insurance for unemployed drivers

Cheaper car insurance for unemployed drivers can be attained, if you know where to look and have the right advice.

Here’s Compare UK Quotes’ list of tips for cheaper car insurance:

  • Shop around – Use Go Compare and Confused.com to compare car insurance quotes.

  • Don’t be loyal – Auto-renewing probably won’t save you money and new customers get better deals.

  • Pay annually – Don’t pay monthly as you will be required to pay high interest charges.

  • Drive fewer miles – Whether you car-share or take less trips, driving less miles will decrease premium costs.

  • Avoid add-ons – Removing optional extras that you do not need will save you money.

  • Drive a smaller car – Choose the type of car you drive very carefully as it can have a huge impact on premiums.

  • Avoid modifications – Modifying your car is a dangerous (and expensive) game to be playing.

  • Use security gadgets – Improve your security with dash-cams and approved alarms.

  • Make security changes – Try parking your car off-road or in a garage overnight if possible.

  • Consider telematics – You could save hundreds with black box car insurance.

  • Build a no-claims bonus – You could save up to 70% on car insurance with a five-year no-claims discount.

By using our tips for cheaper car insurance, you should be able to find yourself an affordable deal for your car insurance, irrespective of your situation.

For more information on getting cheaper car insurance, see the following guides:

How to Get the Cheapest Learner Driver Insurance

5 Gadgets for Cheaper Car Insurance

How to Save Money on Your Car Insurance Premiums

How Multi Car Insurance Can Save You Money

Best car insurance for unemployed people in the UK

As we mentioned, shopping around for your car insurance if you are unemployed is a must, and what better place to start than Go Compare?

You must compare car insurance quotes if you want to find the best – and most affordable – deal for your personal situation. Go Compare does a lot of the work for you and provides you with information on product features and prices from all the best car insurance companies in the UK, so you get to choose your policy based on the quality of the cover, as well as its cost.

Tap the link below to find the best car insurance for you!

Keep in mind that you might not be unemployed forever, so be sure to contact your insurance providers when you are back in full-time work and they are likely to offer you a cheaper premium when you renew your policy. Alternatively, if you feel the renewal quote your current provider offers isn’t cheap enough, switch to a new provider using a comparison site like Go Compare or Confused.com!


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