car insurance ratesis complicated. Providers look at a ton of factors to determine what you pay. It can be confusing trying to track down everything that might be considered when you start comparing rates; it might even be the source of a headache trying to figure out whether you’re being overcharged.
You probably know about how your driving history, the type of vehicle, and your
credit scoreaffect the price you pay for insurance, but there are smaller factors that can drive your rate up that might not be on your radar. One of those factors is your job.
Why does your job affects your car insurance rates?
Insurance providers collect data about your occupation and education from the application process. They do this because they know there is a correlation between these factors and the potential that you will make a claim.
The Consumer Federation of America has discovered that most major insurers charge people with less education and lower-status jobs more for insurance than people with more education and higher-status positions.
This happens because statistically, these factors, along with lower credit scores, usually translate to drivers that will experience more car accidents. Though the ethicality of these practices is still in question, your job can affect your rate of pay in equally significant ways.
Insurance companies are not allowed to discriminate against you based on your income, but they are allowed to use your job title as a determining factor for your rate.
While this results in statistics like the one mentioned above, it doesn’t always fall on the class-based lines. Whether you work a blue-collar job or you have a "Dr." added to your name, your car insurance prices are always determined based on one thing—risk.
How your job affects your car insurance rates
Insurance providers spend a lot of time and money on calculating risk. They’ve determined that some positions are riskier to insure than others.
Autoinsurance.org, teachers, nurses, and police officers are understood to be low-risk policyholders, while doctors, athletes, and photographers tend to have higher rates because they work in more chaotic environments.
Your insurance rate is also determined based on what you use your vehicle for. If you use your vehicle for work, it’s possible that you need commercial car insurance, which generally costs more.
It’s alright for you to use your personal car to drive to job sites or make deliveries, but if employees drive the vehicle, you have it insured under your business’ name, or you have equipment permanently installed in it, you need commercial car insurance.
Insurance companies also categorize drivers based on whether they drive primarily for pleasure or for work. If you’re retired or you work from home, you are considered a pleasure driver, the lowest usage-rate classification.
If you commute to work, your rate will go up based on where you live and how long it takes you to get to work. The longer your commute, the higher you’ll pay for insurance.
Keeping your insurance costs down
This all can sound a little scary, but it’s important to know that your job is just a small part of what determines your premium rates. The main factors driving the price of your car insurance are your driving history and credit score—things that you are probably more comfortable with changing for the sake of your insurance.
Another way you can control the price of your car insurance by shopping for policies with
Jerry. Jerry compares prices with up to 45 different companies so you don’t have to do all the homework yourself.