Navigating a Job Change and Its Effects on Insurance Coverage

Many people change jobs in the fall season, just before the new year. In some cases, the switch may mean a different commute time or it may mean a change in address. Or, you may have started your own business and are working from home. If you just found a new job, you should be aware that it may affect your insurance policies, too, whether it be car insurance, home insurance, health insurance, business insurance or life insurance. Take a look at each type of insurance below, and see if there are some steps you need to take to have your insurance house in order.

Key Takeaways If your new job involves a shorter commute or allows you to work from home, you may be eligible for a lower car insurance rate. If you move for your new job, your new home will have a whole set of new risks and a different rate. Don’t assume that an employer sponsored plan is more affordable than buying your own individual health insurance policy, especially for a family. It’s a good idea to protect yourself against losses common to your type of business. Most employer sponsored life insurance policies offer very limited coverage so consider a private life insurance policy to supplement it.

1. Car Insurance

It’s important to report changes that affect your car insurance to your agent right away. Changing jobs can influence your car insurance policy in the following ways:

Commute Distance

Car insurance rates are often based on your daily commute. If your new job involves a shorter commute or allows you to work from home, you may be eligible for lower rates, maybe even a very low rate. Conversely, a longer commute may result in higher premiums because your chances of having an accident are higher. You are required to honestly report your commute mileage to your insurer.

Business Use

If your job change involves using your vehicle for business purposes (e.g., deliveries, sales visits, open houses), you may need to buy commercial car insurance. Personal auto insurance does not cover commercial use of a vehicle, so you might need a commercial auto policy. Otherwise, you may not get a claim paid if you have an accident while using the car for work purposes

Location

If your new job requires you to move, your car insurance premiums may change based on your new location. Some areas have higher accident rates or theft rates, which can affect rates. Average rates also change drastically from one state to another. Comparing car insurance rates is free and takes minutes, with no obligation to buy. Also keep in mind, you may need a new insurer if you’re no longer in your existing policy’s coverage zone

Wait Times for Coverage

Car insurance policies typically become effective on the date specified in the policy documents. There is usually no waiting period for coverage to begin once the policy is in force.

Personal auto insurance does not cover commercial use of a vehicle, so you might need a commercial auto policy.

2. Homeowners Insurance

Did you have to move for the new job? Did you start your own business? Changing jobs can impact your home insurance in the following ways:

Location

If you move for your new job, your new home will have a whole set of new risks including natural disasters like wildfires or severe storms, different crime rates and a different cost to rebuild your home if it is damaged by a covered peril. Also, there’s a chance you may be leaving the existing insurer’s coverage area so ask questions early on.

Commercial Home Usage

If your new job involves using your home for business purposes (e.g., running a home-based business), you might need additional coverage or a separate business insurance policy to protect your business property and other commercial risks.

Wait Times for Coverage

Home insurance policies become effective on the date specified in the policy documents, which is typically the date the policy is purchased. There is generally no waiting period for coverage to begin, but certain types of coverage, such as flood insurance, may have specific waiting periods.

Remember that flood insurance is never included in a home insurance policy and must be bought separately.

3. Health Insurance

Most people have health insurance through an employer. See how changing jobs can affect your health insurance coverage:

Employer-Sponsored Coverage

If your new job offers health insurance benefits, you may transition from your previous employer's plan to your new employer's plan. This can result in changes in coverage options, deductibles, copayments, and provider networks.

Employee-only Health Insurance

Some employers only subsidize an employee’s health insurance and not their spouse and/or children. You may actually end up paying less by buying a health insurance plan on the marketplace.

COBRA

If there is a gap in coverage between jobs or if your new employer doesn't offer health insurance immediately, you may have the option to continue your previous employer's coverage through COBRA for a limited period. However, this can be expensive since you're usually responsible for the full premium.

Individual/Family Health Insurance

You may need to explore health insurance options on the market if health insurance is not provided with your new job or if you’re starting your own business. You may also need a new health insurance plan if you moved residences for the new job.

Wait Times for Coverage

You can generally use your health insurance for doctor visits, screenings, and vaccinations shortly after enrolling.

4. Business Insurance

If you are a new business owner or entrepreneur you will have to make some important decisions about commercial insurance. You are not legally required to buy business insurance other than workers compensation, if you hire one or more employees. However, having the right coverage may prevent closing down shop for good if your business suffers heavy losses.

Type of Business

If your new job involves a different type of business or industry, your insurance needs will change. You may require different types of coverage, such as general liability insurance, professional liability insurance, commercial auto insurance or commercial property insurance. You may find that you’ll save money by bundling coverages with a business owners policy (BOP).

Employee Coverage

By law, you will need workers compensation if you hire anyone. It’s also a good idea to protect yourself against losses common to your type of business.

Wait Times for Coverage

Waiting periods for business insurance can vary depending on the type of coverage and the insurance provider. Some types of business insurance, such as property insurance, often have coverage that starts immediately after you buy a policy

Other types of coverage, such as business interruption insurance, may have waiting periods before coverage applies.

If your new employer does not offer life insurance, it’s a good idea to compare your options and buy a private plan on your own.

5. Life Insurance

Most employer sponsored life insurance policies offer very limited coverage. Also, a job change may affect your life insurance coverage in the following ways:

Employer-Provided Coverage

Many employers offer group life insurance as an employee benefit. If your new job provides life insurance benefits, you may have access to different coverage amounts and options. Review the policy and decide if you need more coverage by buying a private life insurance plan.

Conversions

If your previous employer provided group life insurance, you may have the option of converting the group policy to an individual one. You may also be able to roll it over to your new employer's plan.

No Life Insurance Benefit

If your new employer does not offer life insurance, it’s a good idea to compare your options and buy a private plan on your own. Educate yourself on the different type of life insurance plans before comparing prices

Wait Times for Coverage

Most life insurance policies go into effect as soon as the policy is issued and the initial premium is paid. There is typically no waiting period for the death benefit to be paid out if the insured person passes away during the policy's term.