High Insurance Rates Linked to Occupation


A policyholder’s job may have everything to do with how much he or she will pay for car insurance. According to a recent study conducted by researchers, a driver’s educational attainment and current occupation is mostly to blame for high premiums in many states. The study suggests that insurers often depend on their policyholders’ jobs to determine rates. Some providers base premiums on the risks associated with certain occupations, supported by scientific research and statistical data.

High Insurance Rates Linked to OccupationIn recent years however, insurers have shifted to an entirely new basis. While the providers still rely on the motorists’ occupation and education level, the focus has shifted to their vulnerability to file for claims. This has led to a change in the usual line-up of the most preferred occupations by the insurers.

The study, conducted by the Quality Panning Corporation (QPC), highlights the need for continuous re-evaluation of how the auto insurance industry assesses its clients. Experts agree that policyholders need to know how providers come up with rates to better anticipate the rising costs of insurance. They also add that car owners can find ways to lower their premiums by simply familiarizing themselves with the processes within the car insurance industry.

In a dramatic twist, researchers were able to find out that policyholders who hold most of the preferred occupations got into more accidents than other motorists. For instance, doctors ranked second out of ten occupations for the number of car accidents. Students placed first on the list, which is understandable, say insurance analysts. The high ranking of doctors, however, has surprised many experts.

Even so, doctors pay for significantly lower premiums. While this may be counter-intuitive since insurers often slap hefty rates on accident-prone policyholders, the study suggests that providers have changed how they assess clients. According to many analysts, insurance companies now rely on the number of filed insurance claims per occupation to come up with ways to determine insurance premiums. They explain that providers rely on data that shows which professions see more insurance claims.

Because of this, ordinary construction worker usually pay more for insurance than doctors and other professionals like engineers. Since these preferred occupations offer more income and compensation, policyholders are more likely to pay for property damage from their own pockets, rather than let their insurers pick up the tab. For this reason, providers often prefer occupations that see fewer insurance claims.