Last Updated on December 5, 2025

You’re unemployed and you need car insurance—now what? Can you still get coverage? Does your employment status impact your rates? The good news: being unemployed does NOT prevent you from buying car insurance, and in some cases, you may even pay less.

Below, we explain how employment status interacts with auto insurance pricing, why it’s illegal for insurers to discriminate based on employment, and how unemployed drivers can still find cheap coverage.

Key Takeaways

• Being unemployed does not raise your insurance rates or disqualify you from getting coverage.
• Unemployed drivers often drive fewer miles and may therefore pay less for insurance.
• It is illegal for insurers to deny claims or coverage based on employment status.
• Occupation-based discounts exist, but they’re small and optional—not tied to joblessness.

Insurance Companies Will Not Penalize You for Being Unemployed

When calculating your insurance premium, companies look at several key rating factors:

• Age and driving experience
• Driving record and claims history
• Your annual mileage
• Credit score (in most states)
• Vehicle make, model, and age

Some insurers ask for your job title because certain professions qualify for small discounts—but insurers legally cannot raise your rates or deny you coverage for being unemployed. Your occupation may occasionally help you save, but unemployment never hurts your eligibility.

Unemployed Drivers Might Actually Pay Less for Car Insurance

Many unemployed drivers are surprised to learn they may actually pay less for insurance. That’s because unemployment often leads to lower mileage—no daily commute, no rush-hour traffic, and fewer high-risk driving situations.

If you’re not driving much, your insurer may classify your vehicle as “pleasure use” instead of “commute use.” A pleasure usage rating generally comes with cheaper rates because:

• You spend less time on the road
• You avoid peak-risk driving hours
• Your annual mileage is below average

If you’re unemployed and driving less, you may qualify for a discount automatically.

It’s Illegal for Insurance Companies to Deny Your Claim Based on Employment Status

Your employment status has no bearing on your right to coverage or claims payouts. Insurance companies must treat unemployed drivers the same as employed drivers.

If an insurer tried to deny a claim because of your job status, state regulators could impose fines or penalties. Employment discrimination in insurance rating and claims handling is illegal in all states.

However, factors related to unemployment—like poor credit or a lapse in coverage—can affect rates. But the unemployment itself cannot.

FAQs

Some “Less Risky” Occupations Qualify for Discounts

Your employment status (employed vs. unemployed) does not affect your rates—however, your job title sometimes can.

Certain jobs traditionally associated with lower-risk driving may qualify for small discounts. These may include:

• Teachers
• Military members or veterans
• Engineers
• Dentists
• Accountants

Even then, these discounts are small, limited, and vary by insurer. Many companies do not offer occupation-based discounts at a