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Will My Auto Insurance Company Raise My Rates if I’m Unemployed

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Your auto insurance company rates likely won’t change if you lose your job. If you are unemployed and are unable to pay your bills on time, your credit rating may be affected. In some states, auto insurance companies can pull an applicant’s credit history and use this information as part of their underwriting process. A person who has a lower credit rating may be interpreted as presenting a higher risk to the insurance company and will be charged higher rates for coverage in that instance.

Auto Insurance Rates for Drivers

Insurance companies use a proprietary formula for determining how much to charge their customer for coverage. Each one will determine how much risk it is willing to assume on behalf of its policyholders, which means that prices for the same type and level of protection can vary significantly between insurers.

The exact formula for determining how much to charge drivers for their coverage is a closely-guarded secret, but insurers consider several factors when deciding how much to charge policyholders, including:

Driver’s Age and Gender

Insurance companies look at how long a driver has been licensed when setting rates. A person who has been licensed for several years and who has a clean record will be able to qualify for lower rates than a newly-licensed individual. Young men are considered high risk for auto insurance purposes, and they are charged higher rates for their coverage than drivers who fit a different profile.

Marital Status

An insurance company will ask whether an applicant is married, and it’s not out of simple curiosity. Drivers who are married are considered more responsible than singles, and can get better rates on their coverage as a result.

Make and Model of the Vehicle

Some cars cost more to insure because they are more likely to be stolen. Other models, such as SUVs, cost more to cover because of their potential to cause damage to other vehicles and property when a collision occurs. Sports cars are also more costly to insure because this type of vehicle is meant to be driven fast, and the owner is more likely to be involved in an accident while behind the wheel.

Location

When an insurance company is setting rates for its customers, it will ask where the car will be garaged. A driver who lives in an area where several car thefts have been reported will be charged higher rates for his or her coverage. It’s possible to get better rates on auto insurance coverage if the vehicle is kept in a locked garage when not in use.

 Annual Mileage

Insurers ask about annual mileage because they know that drivers who spend more time on the road present a higher risk for car insurance purposes. A driver who limits his or her time behind the wheel by leaving the car at home and taking public transportation to and from work can save on the cost of his or her auto insurance coverage.

 

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