If you drive, you probably own a car, which means you are required by law in most places to carry auto insurance to prove financial responsibility. You likely are aware of the factors used to calculate your insurance rate: the type of car you drive, your driving record, how often you drive, your age, how long you've been driving and where you live.
But did you know that in many places the type of job you do is also one of the criteria used to determine your auto insurance rate? Many people find this surprising. Certainly it seems logical that driving to work regularly during the day on a known route in heavy traffic presents different risks than driving out to the mall in the evening. But what does the nature of your occupation have to do with your risk of having an accident?
Insurance companies set rates based on statistical data that assesses likelihood of having an accident. For example, statistics show that married people have fewer accidents than the general population. Women in general tend to have fewer accidents are less likely to engage in risky behavior such as driving under the influence of alcohol.
Companies employ underwriters, who investigate risk factors and calculate the probability of loss and the amount of money the insurance company might have to pay out on the policy should loss occur.
In addition to statistical data, underlying behavior assumptions are made. Many companies use credit ratings as part of their underwriting risk assessment, since rightly or wrongly, people with good credit are thought to be more stable and more responsible, thus more likely to obey the rules of the road and pay their premiums on time.
Your occupation, therefore, affects your car insurance rates for a variety of reasons that include statistics, behavior, travel patterns and location. Certain occupations are more likely to be involved in accidents, while certain personalities and behaviors are more common to specific occupations. Life insurance is higher for people in occupations with greater risk of injury and death, and it’s similar with auto insurance.
Moral hazards also make assumptions about the attitude and conduct of certain people, such as an inclination to be reckless. Fame may be involved, since a car crash for a sports star could result in a high-payout injury. Some occupations are linked to higher levels of social drinking, along with increased likelihood of driving under the influence of alcohol. In some cases the reasons seem fairly obvious. Race car drivers pay more for insurance because they tend to be younger men who drive fast, expensive cars for a living.
In other cases, the reasons are less apparent, but rest assured, insurance underwriters use reams of statistical data and they have calculated occupational risk to a very detailed level, assessing drivers on a whole host of unique employment factors, such as:
- Level of stress, low versus high
- Occupation training involves the safety of others
- Amount of job-related travel
- Potential for distractions, i.e. cell phone
- Use of public transport as part of the job
Occupations considered low risk, assessed at a lower auto insurance rate, include:
- school teachers
- police officers
Each of these jobs requires a personality that is meticulous and pays attention to detail, which in turn indicates careful driving habits. Nurses and teachers are overwhelmingly female, and are considered stable, respected professions. Pilots depend on navigating expertise and would jeopardize their pilot’s licence with a DUI. Many of these jobs are considered low stress.
On the other hand, these occupations are considered high risk and pay a higher auto insurance rate:
- social workers
- business owners
These jobs are high stress and may involve long hours or overtime. Doctors, in fact, have an accident rate that is almost the same as teenage drivers, possibly due to associated sleep deprivation. Workers in this category are also more likely to be self-employed and drive more often to client meetings or job sites. The occupations are also associated with a greater likelihood of cell phone use while driving or transporting clients.
Although your occupation may contribute to higher or lower auto insurance rates, not all companies apply these criteria in the same way. There are also a number of ways you can keep risks down and prove that you are a safe driver to a potential insurer. Just as with all auto insurance, it's important to shop around and compare insurance companies so as to get the best rate tailored to your needs.
For more information or questions on Battle Creek Auto Insurance, give Allen Harmon Mason Selinger Insurance Agency a call at 269-441-5156 to get a free auto insurance quote.