Occupation and Car Insurance
Unless you live in California, your occupation is likely one of the criteria used to calculate your auto insurance rates. In fact, many insurance companies place a surprisingly strong emphasis on a driver's profession when calculating rates.
Could your occupation be driving up your auto insurance rates? If so, is there anything that you can do about it?
Why Does Occupation Matter?
You're probably wondering why your occupation would come into play at all when it comes to car insurance. To understand why occupation plays a role in your insurance rates, you need to remember insurance carriers are all about assessing risk.
By law, car insurance companies are allowed to consider facts that are predictive of loss. Through the years, numerous studies have revealed that driver in certain professions are likelier to file expensive claims than other. Insurance companies use this type of date to assign risk levels.
High-Risk Vs. Low-Risk Occupations
The data has revealed that drivers in certain occupations are more likely to be involved in accidents and more likely to file claims. For the purpose of car insurance rates, high-risk occupations are defined as those that involve:
- High levels of stress.
- Lack of sleep.
- A lot of driving.
Examples of high-risk occupations include:
- Real estate brokers.
Contrastingly, certain occupations are seen as being lower in risk when it comes to auto insurance. Professions that require a high degree of accuracy and attention in detail tend to be considered lower-risk. People who work in these professions tend to be more stable and are therefore less likely to files claims.
Examples of low-risk occupations include:
- First responders.
Your job title can also affect how much you pay for coverage, by as much as 25 percent. As a result, it pays to proceed with caution when completing this section of your application. While you should not lie under any circumstances, you should avoid overstating what you do.
Education Levels and Insurance
Usually occupation and education go hand in hand. Low-risk drivers tend to work in skilled positions, often as executives or other higher-up positions. To get there, a low-risk driver typically needs at least a four-year degree, and maybe even a graduate degree. Therefore, insurance companies see a strong correlation between educational attainment and risk.
Someone who's completed higher education is seen as a generally responsible person. ON the other hand, someone who works an entry-level job and who has only earned a high school diploma will likely pay more because of the association between level of risk and education.
Change in Employment Status
It's important to be honest and forthcoming when completing an application for car insurance. When your employment status changes, you MUST notify your insurance provider.
After all, you may switch from what is considered to be a high-rise occupation to one that is considered to be low-risk, meaning you'll save some cash.
Is Considering Occupation Discriminatory
By now, you may think it's discriminatory for insurance providers to take your occupation into consideration when calculating rates. Federal law does prohibit the use of discriminatory factors when calculating rates.
However, factors that are predictive of loss can be taken in consideration, and certain occupations statistically pose more risk for insurance companies than others.
Short of switching careers, there isn't a lot you can do to avoid having your high-risk occupation negatively impact your insurance rates. The best course of action is to do you best with factors that you can control, such as you driving record.