It is no secret that the spread of the COVID-19 pandemic has seen a historic loss of jobs over the past few months. Millions of people are now out of work, with the majority seeking unemployment benefits. Now, more than ever, it is important to find ways to reduce expenses and lower monthly bills.
Although people are out of work, there is still car insurance that needs to be paid. There must be a way to reduce your auto insurance rate by checking out the best cheap car insurance companies and finding a way to get insured without breaking the bank. As you may or may not know, car insurance is a legal requirement for driving on the road in the United States. Different types of coverage are required depending on the state you live in, what type of car you have, and whether you are leasing or loaning your vehicle.
Below, you’ll find helpful tips to reduce costs during this time of need.
Do I Need to Cancel My Current Auto Insurance?
You should not be canceling whatever coverage you currently have. Even if it is difficult to afford right now, it is better to have some coverage than no coverage at all. There are still places you may need to drive to, such as the grocery store or the pharmacy, and you’ll need to be able to legally drive to those places.
You can, however, use this opportunity to assess the nature of the coverage you do have to determine whether a change in coverage is needed. If you are leasing your car, get in touch with the lender to figure out what level of coverage is legally required. In some cases, you may find out that you are paying for more coverage features than you actually need.
But whatever you do, never cancel your auto insurance coverage. A lapse in coverage will take a big hit to your premiums. The insurance company will notice this and immediately raise your costs. Look for a new insurance plan while you hold onto your old one.
How Unemployment Affects Insurance Rates
Fortunately, most auto insurance companies do not raise your insurance rates just because you are unemployed. Usually, employment status is not one of the factors taken under consideration when determining your insurance premium rate. The factors they do take under consideration include your age, marital status, credit history, ZIP code, and your personal driving record.
What’s the Best Way for Unemployed Drivers to Save Money?
There are some major car insurance companies that are doing good by their customers, offering much-needed financial breaks during this time of the pandemic. It is likely that your auto insurance company has cut you some slack in this past couple of months as they understand that most people are struggling with unemployment. This is something you definitely want to take advantage of!
In addition to enjoying a little bit of a break on your monthly bills, you can also use this time to research other ways to lower your costs and cut your overall monthly expenses. Being unemployed can make finding permanently-affordable auto insurance a challenge.
In the meantime, here are some additional methods of saving money while unemployed:
1. New Technology
If you like the telemetric idea, you can also take advantage of new technologies that will enable you to get cheap car insurance. For example, your car may come with new and improved safety features (i.e., anti-theft and auto-lock technologies and electronic stability control) that can give you a leg up both in terms of protection and discounts on your monthly premiums.
2. Telematics-Based Driving Habits
You can actually adjust your driving habits in order to get a better rate on your auto insurance. This means an investment in telematic-based insurance programs. These are companies where you can choose to enroll in that will track your driving habits using automated technology through your smartphone or an in-car device.
If you are a low-risk driver (you have a great driving record and follow the rules of the road), this is a good option to use. Good driving behavior means your insurance premiums can be lowered. It’s always a good idea to take advantage of a discount!
Watch out, though, because if you engage in poor driving habits while enrolled in a telematics program, it might cost you with an upsurge in premium prices.
When you’re a safe driver, you are saving your life and you are saving money on your car insurance. Companies calculate your premium rates based on how risky of a driver you are, and whether you pose a risk to others. The safer and more well-behaved you are on the road, the more you can save on your insurance plans.
You are seen as a risky driver if you are someone who drinks and drives, texts on the roads, or gets speeding tickets. The more citations you have, the more your driving record will work against you.
4. Pay-Per-Mile Plans
Want a new way to pay for auto insurance? If you are currently unemployed, you may benefit from a new auto coverage option: pay-per-mile. This is especially beneficial to those who may be working from home or who are furloughed and don’t plan on using the car very often.
If you don’t drive that much, try opting for a pay-per-mile insurance plan. This can make it so that you don’t have to pay the same price as those who drive hundreds of miles every day. Just pay as you go, and you could end up saving a fortune on your car insurance!