October 4, 2009

Does Your Occupation Affect Your Insurance Rate?

When shopping for auto insurance, there are a couple of different factors that contribute to how much one will pay in auto insurance premiums. One’s age, gender, marital status, driving history, type of vehicle, credit rating and safety features of the car are just a few of the things that lead to the rate an auto insurance company will offer. Another piece of influential information determining what sort of auto insurance rate you will receive is your occupation.

Why do people in different occupations receive differed rates? The simplest answer is because an occupation partially determines the risk a driver is at for getting into an accident. One way to understand is to look at life insurance policies. People who smoke have to pay more for insurance than people who do not. That’s because smoking increases the risk of death, and therefore the insurer is at greater risk of having to make a payout. Likewise, people whose professions put them a higher risk of getting into an accident will end up with a higher auto insurance rate.

For example, an executive, small business owner or anyone who is self employed, will likely end up with a higher auto insurance premium than those in other occupations. That is because they are more likely to spend time driving in their car. They are also more prone to being on their cell phones, likely while driving, longer than a typical person. Because of those two factors, they are at more risk of getting into a car accident, hence the higher auto insurance rate.

On the flip side, scientists, pilots and people who are either retired or unemployed will have lower auto insurance premiums. Scientists must be very methodical on their job. Because of that methodical approach, insurance agencies tend to believe that they will be methodical in other areas of their lives including driving. The reason a pilot pays less is because their job requires them to be a good driver not only in the air, but on the road as well. If a pilot were to get into a major accident or be caught driving while intoxicated, they could easily lose not only their job, but also their ability to get another job in the same field. People who are retired or are unemployed are also seen as less risk because they do not have to commute to and from work each day.

It’s not worth seeking out a different line of work to lower your auto insurance rate, it is however smart to take this into consideration when figuring out what you may be paying in auto insurance.