Does a job affect auto insurance rates? (2024)
A job does affect auto insurance rates since drivers with long commutes pay around $7/mo more for their coverage. Below, we'll overview how distance from work affects insurance rates, how employment status affects car insurance, and what occupations offer cheap car insurance coverage.
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Kalyn Johnson
Insurance Claims Support & Sr. Adjuster
Kalyn grew up in an insurance family with a grandfather, aunt, and uncle leading successful careers as insurance agents. She soon found she has similar interests and followed in their footsteps. After spending about ten years working in the insurance industry as both an appraiser dispatcher and a senior property claims adjuster, she decided to combine her years of insurance experience with another...
Insurance Claims Support & Sr. Adjuster
UPDATED: Feb 15, 2024
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Feb 15, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Occupation impacts car insurance due to vehicle usage and stress level
- Annual mileage will impact how much you pay for car insurance
- Insurers offer various occupational discounts for cheaper rates
A job affects auto insurance rates since insurance companies consider annual mileage and even the stress level of your job, which affects driving habits. However, insurers consider many other factors, such as age, driving record, and gender.
Read More: Top 7 Factors That Affect Auto Insurance Rates
Read on if you’re interested in learning how your job can affect your insurance and how to get cheap auto insurance rates for your occupation.
How Your Occupation Affects Auto Insurance Rates
Insurance companies will ask you what you do for a living when you’re applying for coverage. They might even ask about the highest level of education that you’ve completed.
Both of the answers that you give can increase or lower your auto insurance premiums. In fact, the best auto insurance companies have found that there’s a direct correlation between education and claims.
Both your occupation and education are used together to determine how much you’ll pay.
Professionals in skilled positions and executives who have completed college tend to pay less for insurance than entry-level or blue-collar workers who have only a high school diploma.
The Consumer Federation of America has done an analysis to show that most major insurers charge their clients with less education and a lower status job higher rates.
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Jobs That Carry Less Risk
Insurance premiums are calculated by analyzing the risk class. In the industry, state officials in charge of regulating the insurance industry prohibit the use of factors that are discriminatory in nature and that have no relation to risk.
Some of those factors include the policyholders:
- Income
- National origin
- Religion
While income can’t be considered when calculating your rates, the title that you hold can. What you do on a regular basis can affect how likely you are to be exposed to an accident and how likely you are to file a claim.
Some occupations carry less risk than others, such as teachers, nurses, pilots, and police officers.
Read More:
- Cheap Auto Insurance for Teachers
- Best Auto Insurance for Nurses
- Best Auto Insurance for Law Enforcement
These pay less than other professionals because they must pay attention to details and are less likely to get into an accident.
Doctors, athletes, and photographers are higher risk drivers who tend to pay higher rates because they work in more chaotic environments. (Read More: Best Auto Insurance for Doctors)
Some Professionals May Have to Buy Business Auto Insurance
If you’re driving your personal vehicle to conduct business, there’s a chance that you won’t qualify for a personal policy.
It’s important that you can distinguish between personal car insurance policies and business car insurance policies if you drive a vehicle with commercial equipment or if you drive your vehicle for business purposes.
In most cases, if you drive your personal car to job sites or to deliver consumer goods, you can buy personal car insurance. If your car is in your business name or your employees drive it around, you'll need business insurance.Michael Vereecke Commercial Lines Coverage Specialist
You also need a commercial auto insurance policy if there’s any permanent commercial equipment installed in the car. Keep this in mind as you’re shopping around.
Your job can directly affect your premiums, but the indirect effect could be even worse. If you go from being unemployed to employed, you need to make changes to your policy so that your policy is rated right.
How you use your vehicle can have a dramatic effect on your rates because users can leave you more exposed to loss.
Individuals who work from home, are retired, or are unemployed will be rated as pleasure drivers. This is the lowest rated usage classification because you’re not driving during peak hours when there are traffic jams.
Commuters and business drivers pay higher rates because they go to and from offices during high-traffic times.
If you commute to and from work, how much your rates will go up depends on a few different factors. First, the insurance company will ask you how many days per week you work. Next, the company will ask you how many miles you drive to and from work daily.
These answers will be used to determine how many commuting miles you’re driving annually.
How Annual Mileage Affects Rates
Does annual mileage affect auto insurance rates? Your commuting miles and your annual miles are two different numbers. If you have a long commute, especially if you live in one of the areas with the most expensive commutes, it could affect your chances of qualifying for mileage discounts. Insurance companies have their own mileage rating groups that carry different rates.
You can fall into average, high, or low mileage groups. To be considered a low mileage driver you need to drive less than 5,000 miles per year.
Auto insurance policyholders who drive between 5,000 and 12,000 miles per year typically pay average rates. Drivers who exceed the average of 12,000 miles per year will pay a high mileage surcharge. Carpooling can keep your mileage down.
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Car Insurance and Occupation: Understanding The Relationship
Car insurance rates by occupation vary, and some of the effects are more direct than others. You should always compare auto insurance rates whenever you’re trying to find a good deal.
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A quick way to comparison shop is to use an online quote tool. Enter your personal information, be upfront about your occupation, and commute, and then you can find the best deal by reviewing instant insurance quotes.
Frequently Asked Questions
Does your occupation affect your car insurance?
Yes, your occupation can affect your auto insurance rates. Insurance companies consider factors such as your occupation, education level, and driving habits when determining your premiums.
Which occupations carry less risk?
Some occupations are considered to carry less risk than others when it comes to auto insurance. Jobs that involve attention to detail and have a lower likelihood of accidents, such as accountants, teachers, or engineers, are typically associated with lower insurance rates.
Do some professionals need business auto insurance?
Yes, if you use your personal vehicle for business purposes, you may need to consider purchasing a business auto insurance policy. This is especially true if your vehicle is in your business name or if you regularly drive your vehicle to job sites or deliver consumer goods.
Does my job affect my insurance rates indirectly?
Yes, your job can indirectly affect your insurance rates. Factors such as whether you are employed, unemployed, or retired can influence your rates. Individuals who work from home, are retired, or unemployed are often classified as pleasure drivers and may have lower insurance rates.
Does annual mileage affect insurance rates?
Yes, your annual mileage can affect your insurance rates. Insurance companies consider both commuting miles and annual miles when determining premiums. If you have a long commute or high annual mileage, you may be at a higher risk of accidents and may not qualify for mileage discounts.
Does your income affect auto insurance?
Your income shouldn’t have a direct impact on your car insurance premiums. However, low-income drivers may be more likely to purchase less coverage to save. (Read More: Best Auto Insurance for Low-Income Drivers)
What jobs are cheapest for car insurance?
Usually, jobs that don’t require much driving or have fewer risks have cheaper rates. Some occupations for cheap insurance include teachers, nurses, and accountants.
Why does car insurance need to know your occupation?
Most insurers believe your job offers a glimpse into whether you’re a high-risk driver. For example, a truck driver might see higher rates because of the time they spend on the road.
Is car insurance cheaper if you are unemployed?
Unemployment status doesn’t affect your car insurance rates. However, you can find cheap auto insurance when unemployed from Erie, Geico, and State Farm.
Read More:
Does being a student affect car insurance?
While being a student won’t directly affect your rates, young drivers usually have higher rates due to driving inexperience. Fortunately, many top providers offer discounts specifically for students, such as a good student auto insurance discount.
Read More: Best Auto Insurance for a Student Away at College
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Kalyn Johnson
Insurance Claims Support & Sr. Adjuster
Kalyn grew up in an insurance family with a grandfather, aunt, and uncle leading successful careers as insurance agents. She soon found she has similar interests and followed in their footsteps. After spending about ten years working in the insurance industry as both an appraiser dispatcher and a senior property claims adjuster, she decided to combine her years of insurance experience with another...
Insurance Claims Support & Sr. Adjuster
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.