Do auto insurance companies check employment status? [Expert Advice + Rates]

Car insurance companies can check your employment status, but they can't deny you coverage if you're unemployed. However, there are other ways that your job can affect insurance rates. Read on to find out more.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Jun 10, 2022

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Things to Remember

  • It is illegal for auto insurance companies to deny drivers coverage because of unemployment alone
  • Insurers can and do perform employment verification processes, though
  • Insurers often consider occupation when setting rates

When shopping around for auto insurance, you may have encountered a request for employment verification. This may have you wondering, can auto insurers disqualify you based on your employment status?

The good news is that no, they can’t. There are plenty of options for auto insurance for the unemployed. However, what you do for a living can affect your auto insurance rates.

Will your auto insurance company check your employment status?

Insurance companies often require verification of your employment, but the process is not about approving or denying applicants. Rather, several factors tied to employment play into the types of rates a company can offer you.

Occupation Affects Car Insurance Rates

Though an insurer can’t deny you coverage if you admit you’re unemployed, your job affects auto insurance. GEICO — one of the major insurance providers in the nation — is notorious for charging individuals with high school diplomas more than persons with college degrees. The GEICO employment verification often leads to certain workers being charged more. Here is a snapshot of the difference in rates based on the insured’s occupations:

GEICO Average Monthly Auto Insurance Rates Based on Occupation
OccupationsGeico Average Monthly Rates
Homemaker$67.92
Professor
w/ College Degree
$71.68
Military Officer$139.47
Psychiatrist$145.25
Military$145.85
Administrator$151.00
Surgeon$152.80
Student$157.98
Machinist/Toolmaker$159.87
Barber/Beautician$161.72
Currently Unemployeed$165.33
Chef$173.15
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Other major insurers, including Progressive, Liberty Mutual, and Farmers, also give considerable weight to occupation and education when setting rates.

Mileage Affects Car Insurance Rates

Another way employment status can affect your insurance rates is that going to work often involves driving. When your mileage increases, insurance rates tend to increase. If your employment status changes and results in a decrease in the number of miles you put on your vehicle, you may qualify for lower rates. In fact, according to the Consumer Federation of America study, homemakers pose the least amount of risk in insurers’ eyes and pay an average rate of $67.92 per month through GEICO.

Commute Affects Car Insurance Rates

One of the common factors that affect car insurance rates is usage. You can select two main types of usage when applying for coverage: “pleasure” and “commute.” Pleasure usage means you use your vehicle strictly for pleasure, such as running errands and taking weekend trips. Because you use your vehicle infrequently, you will likely earn lower rates.

If you select “commute” for your vehicle’s purpose, your rates will likely increase. If you mention that you use your car or truck as a business vehicle, you are likely to pay the highest rates of any other occupation.

Credit Score Affects Car Insurance Rates

Though your credit score is not directly related to your employment status, unemployed people generally have lower credit scores than those with steady, well-paying jobs. Many insurers consider credit scores when determining rates. Why do auto insurance companies use a credit score? It’s because people with poor credit tend to engage in riskier behaviors than people with good to excellent credit.

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Can car insurance companies check employment to deny coverage?

Insurers can’t legally deny an applicant coverage because they do not have a stable job. However, other factors can legally disqualify an applicant, including:

  • Accident history
  • License status
  • Driving records
  • Vehicle ownership

Unemployment and/or employment status are not among these factors.

Denying a Person Coverage Because of Lack of Employment Is Discriminatory

Several factors that insurers consider when making coverage decisions may seem discriminatory. For instance, insurers often set rates based on applicants’ age and gender before considering driving history. Insurers can justify this practice because data shows clear correlations between certain demographics and risky driving behaviors.

However, the law does not deem it fair for insurers to turn people away simply because they can’t find gainful or stable employment. After all, there are several reasons why an applicant may not have a job. Those applicants may be any one of the following:

  • A stay-at-home parent
  • A caretaker
  • A college student
  • An entrepreneur
  • A retiree
  • Disabled

Every person’s situation is unique. Moreover, no data shows that unemployed persons have a higher risk of being involved in an accident than employed persons. For these reasons, laws prohibit insurers from making coverage decisions based on employment status alone.

Certain Jobs Qualify for Auto Insurance Discounts

Some insurance companies, especially the larger ones, offer occupational discounts for persons in certain positions. If you think you may qualify for a discount, you will need to provide your insurer with your employment information.

Not all occupations qualify for discounts, and not all insurance companies offer the same occupational discounts. However, most insurers will offer car insurance discounts to professionals who work in the education, government, or civil defense sectors.

If you qualify for a discount, you will need to supply additional employment information. This may include the following:

  • Your job title and status within the organization or company
  • The number of years you have been with your company or organization
  • Your employer’s address
  • Your estimated wages or salary
  • Your supervisor’s name

Every insurance company is different, though, so expect to have to provide more or less information for each application.

Be Honest About Your Employment

After reading this guide, you may be tempted to lie about your occupation or employment status to garner lower rates. Experts urge you not to do so. Deliberately misinterpreting information on an insurance application to score lower rates is a form of insurance fraud, which can carry both civil and criminal penalties. Be honest about what you do, and always keep your insurer up to date when your employment status changes.

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Yes, Car Insurance Companies Do Check Employment

But insurance companies can’t deny you coverage based on your employment status. Whether you are employed full-time, part-time, or not at all, you should be able to find a company willing to sell you a policy.

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