How Your Job Title Affects Your Car Insurance Rates

Car insurance companies use multiple factors to determine how much you pay for car insurance. Your age and driving record are two of the most influential, but insurers also consider your job title when calculating how risky you are to insure. While Massachusetts, Michigan, and New York prohibit this practice, using your occupation to set rates fair game everywhere else.

In a nutshell, if your insurer considers your occupation to be high-risk, you’ll likely pay more for car insurance. But if your job is lower-risk, you may get cheaper rates. For example, mechanics and administrative assistants pay cheaper-than-average rates, while students and military members pay higher-than-average premiums.

Below, we explore how occupation affects car insurance and ways you can save on your auto premiums.

Key Takeaways:

• Homemakers pay the lowest average premiums of any profession, at $108 per month.
• The most expensive occupation for car insurance is the military, at $194 per month.
• Rates vary by profession because of factors like location, driving requirements, job-related stressors, and common driving behaviors.

Why Your Job Title Affects Car Insurance Costs

Your job title is one of many factors determining your car insurance rate, but it’s a relatively minor one. Where allowed, insurers can translate the risk associated with your job into what you pay for car insurance.

Insurance companies use data from the Fatality Analysis Reporting System (FARS), state departments of motor vehicles (DMVs), the U.S. Bureau of Labor Statistics (BLS), and others to understand the risks associated with different job titles.

For example, some occupations have higher rates of fatal accidents, at-fault car accidents, and serious traffic violations like DUIs. Others correlate with longer commutes or more late-night driving, which increases the likelihood of insurance claims. High-income occupations make it easier for people to maintain good credit, which can lower premiums.

Job titles can also qualify you for additional discounts. For instance, some insurers automatically award discounts to teachers, civil servants, and military members. Others provide discounts to certain organizations, like the American Bar Association (ABA) or the American Association of Retired Persons (AARP).

How Car Insurance Rates Change Based on Occupation

Though your occupation influences your premiums less than other factors, it can still substantially affect your costs. To help you understand how your job title can affect your rates, we’ve researched occupations to give you an idea of what you might pay.

The table below shows the average premiums for the 25 most common professions, based on total car insurance quotes through Compare.com, and how they compare to the national average.

Homemakers and retirees pay some of the cheapest average rates, according to our research. Their average premiums may be lower because they don’t commute to work every day, are less likely to drive during rush hour, and typically drive more cautiously.

On the other hand, military members and students pay higher-than-average rates likely because they tend to be younger, which means they’re statistically more likely to cause a car accident, according to research from the AAA Foundation.

But job titles aren’t the only factor influencing the costs associated with an occupation. The overall industry of each occupation also affects costs. Let’s examine that next.

Industries With the Cheapest Car Insurance Premiums

Insurers view some industries as lower risk than others, just like job titles.

Here are the industries with the cheapest average car insurance premiums, according to Compare.com data.

Now, let’s look at the three cheapest industries for car insurance and why drivers in these industries tend to get lower rates.

1. Agriculture

Our research found that agriculture industry workers spend an average of $117 per month on auto premiums. Their lower rates might be due to less congested driving conditions, as most agricultural activity is in rural areas. They may also commute less or not at all.

People who work with farm equipment may also be more cautious driving passenger vehicles due to their experience with heavy machinery.

2. Art, design, and media

Drivers in the art, design, and media industry pay an average car insurance premium of $118 per month, according to our data. Jobs in this industry are potentially lower stress, as they encourage self-expression and don’t require a lot of face-to-face time with customers.

It’s also possible that people in this industry are more likely to work from home or have flexible work schedules, which can translate to lower mileage or allow them to drive at non-peak traffic times.

3. Repair and maintenance

Drivers in the repair and maintenance industry tie for the second-cheapest premiums — paying just $118 per month on average, according to our analysis. Their premiums might be lower because people in this industry are more likely to take better care of their vehicles. This can, in turn, lower the chances of accidents resulting from mechanical failures.

Industries With the Highest Car Insurance Premiums

For various reasons, other industries pose higher risks to insurance companies, earning people who work in them higher-than-average rates. The table below highlights these industries and the average monthly premium for each, according to Compare.com data.

Let’s review the top three most expensive industries for car insurance to understand why drivers in each sector are more likely to pay higher rates.

1. Government/military

The average monthly premium for government and military jobs is $172 per month, according to our research. Military members likely pay higher auto insurance rates than average because more than half are under 30, and more than 80% are men.

Younger drivers and male drivers are two groups who are more likely to cause a car accident than older or female drivers, according to the Insurance Institute for Highway Safety (IIHS). This, in turn, may prompt insurers to charge higher premiums for this group.

2. Insurance

People in the insurance industry pay an average of $152 per month for auto insurance, according to our data. They might pay higher rates for several reasons. For one, they’re more knowledgeable about car insurance policies and more likely to take advantage of benefits.

Insurance professionals may also be more likely to purchase policies with broader coverage and higher limits, resulting in higher premiums.

3. Law enforcement and security

Tied for the second most expensive industry, we found that drivers with careers in law enforcement and security spend an average of $152 per month on car insurance. Professions in this industry are often high-stress, and some require more driving time, especially at night when the chances of an accident are higher.

A 2019 analysis by the National Library of Medicine showed that job stress is linked to accident risk.

How to Save on Car Insurance If You Have a High-Risk Occupation

Even if you’re in an occupation with higher average insurance rates, you can use several strategies to reduce your car insurance bill. Here are our five top tips:

• Maintain a clean driving record: Even if your occupation is high-risk, you can avoid traffic violations and accidents to show insurers you’re a low-risk driver.
• Buy a vehicle that’s cheaper to insure: Some vehicles cost less to insure than others, and driving one can lower your rate substantially.
• Increase deductibles: You can raise your deductibles to lower your premium, but make sure you can afford the out-of-pocket costs if you file a claim.
• Take advantage of discounts: Insurers offer many car insurance discounts. For example, if you belong to a professional association, you can ask your insurer about the affinity discount. You can also complete driver training to earn a discount.
• Shop around: One of the best ways to keep your rates low is to compare car insurance quotes from different companies.

FAQs About Occupation and Insurance Costs

Understanding how your occupation affects car insurance can help you manage costs. Here are answers to common questions drivers have about how job titles affect insurance rates.

Does occupation matter for insurance?

Yes, your occupation matters for car insurance because it influences the price. Some professions get lower rates than others for various reasons that connect the profession to a lower risk profile, such as longer commutes, higher stress, or the need to drive at night. Higher-risk professions like the military tend to pay higher premiums as a result.

Why do car insurance companies want to know your occupation?

Insurance companies use your occupation as one of many factors to determine your car insurance cost. Auto insurers analyze a lot of data to assign risk values to different occupations. Once an insurer assigns risk to a general factor, it adjusts rates based on that factor.

Is car insurance cheaper if you’re unemployed?

Not necessarily. Unemployed people pay $123 per month on average — less than the national average of $135, according to our research. But some professions, like mechanics, account executives, and cooks pay less on average than unemployed people. So whether your car insurance is cheaper if you’re unemployed depends on your profession before unemployment.

Do you need to tell your insurance company if you change jobs?

Yes, just like a change of address, you should inform your auto insurance company of any changes to your job title or employment status. Contact your insurance agent if you’re unsure what to put as your profession.

What occupation do you use for car insurance if you have multiple jobs?

In most cases, you should put your primary occupation down if you have multiple jobs. But you should also inform your insurance company of your additional employment.

Should you adjust your job title when buying car insurance?

No. You shouldn’t adjust your job title when buying car insurance because your insurance company can drop your coverage or deny claims if it discovers inaccurate information. Always provide your correct job title to make sure your car insurance policy remains valid. If you’re unsure how to answer questions about your occupation, speak with your insurer.

Data Methodology:

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.

All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.

Sources:

1. Mass.gov, “Massachusetts Consumer Bill of Rights for Automobile Insurance,” Accessed August 29, 2024.
2. Michigan.gov, “Michigan’s New Auto Insurance Law,” Accessed August 29, 2024.
3. New York State Department of Financial Services, “DFS Announces Final Regulation and Agreements with Two Major Insurers to Protect New York Drivers from Unfairly Discriminatory Auto Insurance Rates,” Accessed August 29, 2024.
4. Statista, “Number of active duty United States Armed Forces personnel in 2022, by age group,” Accessed August 29, 2024.
5. AAA, “Rates of Motor Vehicle Crashes, Injuries and Deaths in Relation to Driver Age, United States, 2014-2015,” Accessed August 29, 2024.
6. Journal of Injury and Violence Research, “Driving accidents and job stress: a systematic review and meta-analysis,” Accessed August 29, 2024.
7. Insurance Institute for Highway Safety (IIHS), “Fatality Facts 2022: Males and females,” Accessed August 29, 2024.
8. U.S. Naval Institute, “Department of Defense 2022 Demographic Profile,” Accessed August 29, 2024.
9. National Library of Science, “Driving accidents and job stress: a systematic review and meta-analysis,” Accessed August 29, 2024.