How switching your occupation changes car insurance rates.
Shifting your gig means a potential change to your auto use and job title, which are both factors your provider uses to calculate monthly premiums.
How does car insurance change after changing jobs?
Changing companies within the same industry and career should have no effect your rates, and income level isn’t a factor in car insurance rates. But there are two main factors that could affect car insurance when you switch jobs: commute time and job title.
Commute time
The distance you drive daily has a huge effect on your cost of coverage. For instance, if you work from home every day and mainly use your car for errands and social outings, your rate will likely be lower than if you switch to a job that’s half an hour away.
Job title
By law, insurance providers can’t consider your income when calculating rates. But they can use your title to determine the amount of risk you may incur. For instance, scientists, pilots and teachers tend to have lower rates because their jobs require greater attention to detail. But athletes, doctors and photographers, who tend to work in more chaotic environments, could get higher rates due to the likelihood of distracted driving.
Insurance companies may also factor your job level into calculating rates. So if you’re promoted from a bank teller to an executive in the corporate office, you may pay less overall because your perceived level of risk goes down.
It may not be fair, but one study conducted by the New York Public Interest Research Group found that on average, people in entry-level jobs with no college diploma were being charged 18% more annually than higher-level professionals who hold a diploma.
Compare car insurance rates after a job change
Get cheap car insurance after changing jobs
Be honest about what your new job entails, but think carefully about how you present the title. For example, “apparel designer” might get different rates than “artist.” Jobs with a statistically low risk of filing claims tend to have the best rates.
But remember, there’s no black-and-white formula for tweaking job titles to get the best rates, and it’s just one of many factors that go into calculating your premium. Keep in mind that the occupation you list must still be accurate — otherwise, you’ll be guilty of fraud.
Insurance companies use complex algorithms to determine coverage, and may even consider what times of day you’re likely to be driving in addition to the amount of time you spend on the road. The best way to find good rates is by shopping the market.
You can also look for occupational discounts you might qualify for with your new job. For example, you might save 5% to 10% from some insurers for working in the education field.
How do I update my car insurance after changing jobs?
Get in touch with your provider to update your account. Be sure to discuss your change in title, if any, as well as how your estimated annual mileage could be affected. Methods include:
- Online. Log into your account and edit your driver information.
- Phone. Call your insurance agent to discuss updates.
- Email. Send a note to your agent describing your job change and ask how it could affect rates.
You could also take this as an opportunity to shop for a few quotes to compare what else is out there.
What should I watch out for with car insurance after changing jobs?
Chances are you’ve got a lot on your mind in the midst of this career change. But taking the time to let your provider know could save you money on monthly premiums. Remember to fill them in on:
- Any changes to your expected yearly mileage. Definitely update mileage estimates if your new commute is more or less lengthy than before, as this affects the amount of risk you pose to the insurer.
- Your new job title. Certain jobs pose more risk to insurers, but if you’re taking on a less stressful position, your rates could go down.
- If you’ll be driving the car for work. If you’re using your car to deliver goods, or if one of your employees will be driving the car, you may need to buy commercial car insurance to make sure you’ll be covered in an on-the-job crash. If your new job is driving for an app like Uber or Lyft, you may need to consider rideshare insurance. These are hybrid policies that cover you for personal use and also when you’re on the grind.
Bottom line
Switching jobs can be both nerve-wracking and exciting. To make sure you’re getting the best deal in light of your new gig, be sure to shop the market to compare rates.
