How your job affects your car insurance

Save money by choosing the right policy for your career.

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What you do for a living can have you paying more for your policy. Choosing the right policy at the right price can help you make sure you’re not underinsured or paying the price for a risky career.

How does my job affect my car insurance?

Both your occupation and how much driving you do for your job affect your car insurance rates.

If you travel regularly, drive people in your car for work or transport stock or equipment, you’ll likely pay higher rates for car insurance. In some cases, you may also need special insurance coverage. For example, Uber and Lyft drivers may need to get rideshare insurance.

But even if you don’t use your car for work, your job can still affect your insurance rates. For example, doctors and DJs both tend to work long hours, which can lead to an increased likelihood of accidents — and higher premiums. On the other hand, military personnel are often eligible for exclusive discounts to lower the cost of insurance.

Get car insurance quotes for any occupation

Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
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Enjoy premium perks like better car replacement and accident forgiveness plus local agent support.
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Car insurance and education

Careers tend to be linked to education, and those two factors together can have a major impact on insurance rates. And every insurer calculates it differently. In 2014, the nonprofit New York Public Interest Research Group (NYPIRG) found that a low-wage worker with a high school diploma could pay 19 to 41% more for the same policy than a college-educated professional, even if both people had the exact same driving history.

The study also found that a high-status career can, in some cases, matter even more than driving history. For example, Geico quoted a retail cashier with a high school diploma and a spotless driving record 24% more for insurance than a college graduate executive with two speeding tickets in the last several years.

While Geico, Progressive and Liberty Mutual rates depended on the education and career of the applicant, State Farm did not factor it into the equation — and as of May 2019, State Farm does not ask about your career when obtaining a quote.

Do I need to tell my insurer if I change jobs?

No, not unless it’s a major career, industry or title change. You’re typically required to let your insurer know after a major job change. You might get a different car insurance rate depending on how big of a change it is.

How to choose the right coverage based on your job

Consider how much you drive and how at-risk you are of getting in an accident on the road.

Coverage typeWhat it coversWhy you might need itWho might need it
LiabilityCovers hurting someone or damaging their property and legal costs if you’re suedIf you have a high net worthDoctor, lawyer, salesperson
CollisionCovers repairs to your car after an accident with another vehicleIf you drive oftenContractor, vendor, courier
ComprehensiveCovers non-collision damage to your car, including animal collisions, potholes and windshield cracksIf you drive often or in high risk areasConstruction worker, farmer, contractor
Uninsured motoristCovers repair costs if an at-fault driver can’t afford to payIf you drive an expensive carDoctor, lawyer, salesperson, manager
Personal injury protectionCovers medical costs for anyone involved in a car accidentIf you drive with passengersRealtor, teacher, caregiver, chauffeur, volunteer

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What other factors are used to calculate my premium?

The amount you pay for your car insurance policy is a reflection of how likely an insurer thinks you are to make a claim, and how expensive that claim is likely to be. And some of those factors can also be influenced by your job.

  • The car you drive. A fancy car to impress clients will have a higher insurance rate, but you can get cheaper insurance for a luxury car with extra safety features.
  • How you use your car. More time in the car for your job means higher rates. And a shorter commute will help you save on car insurance.
  • Your driving history. Jobs involving late night or long hours could make you more likely to get in an accident, and having accidents on your driving record leads to higher insurance rates.
  • The type of coverage you buy. You’ll typically need more coverage if you spend more hours on the road for your job, and extra coverage comes at a price.
  • Where you live. Living in a safer area close to your work will net you cheaper rates.

Bottom line

Your career and level of education can affect how much you pay for insurance with certain insurers. While highly educated people with low-risk careers may benefit from this, people who don’t have a college degree or do have a high-risk job may pay less with an insurer who doesn’t factor in your job.

To get the best rate on your car insurance, compare different providers to find the right fit.

Common questions about car insurance and your career

Image source: Getty Images

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