Do auto insurance companies check employment status?
Car insurance companies can check your employment status, but they can't deny you coverage if you're unemployed. However, there are other ways that your job can affect insurance rates. Read on to find out more.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Jun 22, 2023
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Jun 22, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- It is illegal for auto insurance companies to deny drivers coverage because of unemployment alone
- Insurers can and do perform employment verification processes, though
- Insurers often consider occupation when setting rates
When shopping around for auto insurance, you may have encountered a request for employment verification. This may have you wondering, can auto insurers disqualify you based on your employment status?
The good news is that no, they can’t. There are plenty of options for auto insurance for the unemployed. However, what you do for a living can affect your auto insurance rates.
Will your auto insurance company check your employment status?
Insurance companies often require verification of your employment, but the process is not about approving or denying applicants. Rather, several factors tied to employment play into the types of rates a company can offer you.
Occupation Affects Car Insurance Rates
Though an insurer can’t deny you coverage if you admit you’re unemployed, your job affects auto insurance. Geico — one of the major insurance providers in the nation — is notorious for charging individuals with high school diplomas more than persons with college degrees. The Geico employment verification often leads to certain workers being charged more. Here is a snapshot of the difference in rates based on the insured’s occupations:
GEICO Average Monthly Auto Insurance Rates Based on Occupation
| Occupations | Geico Average Monthly Rates |
|---|---|
| Homemaker | $67.92 |
| Professor w/ College Degree | $71.68 |
| Military Officer | $139.47 |
| Psychiatrist | $145.25 |
| Military | $145.85 |
| Administrator | $151.00 |
| Surgeon | $152.80 |
| Student | $157.98 |
| Machinist/Toolmaker | $159.87 |
| Barber/Beautician | $161.72 |
| Currently Unemployeed | $165.33 |
| Chef | $173.15 |
Other major insurers, including Progressive, Liberty Mutual, and Farmers, also give considerable weight to occupation and education when setting rates.
Mileage Affects Car Insurance Rates
Another way employment status can affect your insurance rates is that going to work often involves driving. When your mileage increases, insurance rates tend to increase. If your employment status changes and results in a decrease in the number of miles you put on your vehicle, you may qualify for lower rates. In fact, according to the Consumer Federation of America study, homemakers pose the least amount of risk in insurers’ eyes and pay an average rate of $67.92 per month through Geico.
Commute Affects Car Insurance Rates
One of the common factors that affect car insurance rates is usage. You can select two main types of usage when applying for coverage: “pleasure” and “commute.” Pleasure usage means you use your vehicle strictly for pleasure, such as running errands and taking weekend trips. Because you use your vehicle infrequently, you will likely earn lower rates.
If you select “commute” for your vehicle’s purpose, your rates will likely increase. If you mention that you use your car or truck as a business vehicle, you are likely to pay the highest rates of any other occupation.
Credit Score Affects Car Insurance Rates
Though your credit score is not directly related to your employment status, unemployed people generally have lower credit scores than those with steady, well-paying jobs. Many insurers consider credit scores when determining rates. Why do auto insurance companies use a credit score? It’s because people with poor credit tend to engage in riskier behaviors than people with good to excellent credit.
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Can car insurance companies check employment to deny coverage?
Insurers can’t legally deny an applicant coverage because they do not have a stable job. However, other factors can legally disqualify an applicant, including:
- Accident history
- License status
- Driving records
- Vehicle ownership
Unemployment and/or employment status are not among these factors.
Denying a Person Coverage Because of Lack of Employment Is Discriminatory
Several factors that insurers consider when making coverage decisions may seem discriminatory. For instance, insurers often set rates based on applicants’ age and gender before considering driving history. Insurers can justify this practice because data shows clear correlations between certain demographics and risky driving behaviors.
However, the law does not deem it fair for insurers to turn people away simply because they can’t find gainful or stable employment. After all, there are several reasons why an applicant may not have a job. Those applicants may be any one of the following:
- A stay-at-home parent
- A caretaker
- A college student
- An entrepreneur
- A retiree
- Disabled
Every person’s situation is unique. Moreover, no data shows that unemployed persons have a higher risk of being involved in an accident than employed persons. For these reasons, laws prohibit insurers from making coverage decisions based on employment status alone.
Certain Jobs Qualify for Auto Insurance Discounts
Some insurance companies, especially the larger ones, offer occupational discounts for persons in certain positions. If you think you may qualify for a discount, you will need to provide your insurer with your employment information.
Not all occupations qualify for discounts, and not all insurance companies offer the same occupational discounts. However, most insurers will offer car insurance discounts to professionals who work in the education, government, or civil defense sectors.
If you qualify for a discount, you will need to supply additional employment information. This may include the following:
- Your job title and status within the organization or company
- The number of years you have been with your company or organization
- Your employer’s address
- Your estimated wages or salary
- Your supervisor’s name
Every insurance company is different, though, so expect to have to provide more or less information for each application.
Be Honest About Your Employment
After reading this guide, you may be tempted to lie about your occupation or employment status to garner lower rates. Experts urge you not to do so. Deliberately misinterpreting information on an insurance application to score lower rates is a form of insurance fraud, which can carry both civil and criminal penalties. Be honest about what you do, and always keep your insurer up to date when your employment status changes.
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Yes, Car Insurance Companies Do Check Employment
But insurance companies can’t deny you coverage based on your employment status. Whether you are employed full-time, part-time, or not at all, you should be able to find a company willing to sell you a policy.
Frequently Asked Questions
Do auto insurance companies check employment status?
Yes, auto insurance companies may check an individual’s employment status when determining insurance rates or eligibility for coverage. Employment status is one of the many factors insurers consider to assess the level of risk associated with a policyholder.
Why do insurance companies inquire about employment status?
Insurance companies inquire about employment status as it can be an indicator of risk. Individuals who are employed typically have a steady income, which may make them more likely to pay insurance premiums on time. Employment can also suggest stability and responsibility, which can influence an insurer’s assessment of the individual’s overall risk profile.
How do insurance companies verify employment status?
Insurance companies may verify employment status through various means, including but not limited to:
- Requesting employment information directly from the policyholder during the application process.
- Utilizing third-party databases or services that provide employment verification data.
- Contacting the employer directly to confirm the policyholder’s employment status.
Can an insurance company raise my rates or deny coverage based on my employment status?
Yes, an insurance company can potentially adjust rates or deny coverage based on an individual’s employment status. However, it’s important to note that employment status is just one of several factors considered, and insurers evaluate multiple risk factors when making coverage decisions. Other factors such as driving record, vehicle type, location, and credit history may also influence the rates or coverage options available.
What if I am unemployed or have recently changed jobs?
If you are unemployed or have recently changed jobs, it’s essential to provide accurate information to the insurance company during the application process. While being unemployed or changing jobs may impact your rates or coverage options, it does not automatically disqualify you from obtaining auto insurance. It’s advisable to discuss your specific situation with the insurance company or an insurance agent to understand how it may affect your policy.
Can I be penalized for providing false employment information?
Yes, providing false employment information to an insurance company is considered insurance fraud and can have serious consequences. If an insurer discovers that the information provided was inaccurate or intentionally misleading, it may result in policy cancellation, denial of claims, or legal consequences. It’s crucial to be honest and provide accurate details when filling out insurance applications.
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Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.