Choosing Great Insurance

Posted on: 29 June 2022

Auto insurance coverage and rates are all about risks. High-risk drivers pay higher rates than low-risk drivers. Thus, anything that affects your risk designation affects the coverage you need and the rates you pay. For example, your job, occupation, or work can affect your car insurance. Below are several ways the effects might arise.

Annual Mileage

Insurance companies consider your annual mileage in rate calculation because it affects your risk of an accident. You have an accident risk every time you are on the road, however slim the risk is. The more you drive, the higher the risk is.

Some occupations require frequent driving and lead to higher annual mileages than others. For example, traveling salespeople spend a lot of time on the road. Those who work on different job sites also accrue considerable mileage moving between different sites. On the other side, those who rarely drive enjoy low-mileage discounts.

Accident Risk

Your job affects your accident risk in three main ways.

Driving Frequency

For example, a field supervisor may drive more frequently than a coder would, leading to lower rates for the latter. The more you are on the road, the higher your accident risk is.

Driving Times

Accident risk is not uniform throughout the day; the risk is higher for some hours than others. For example, those who drive at night face higher accident risks than those who mainly drive during the day. Thus, occupations that require night driving attract higher rates.

Driving Locations

Road risk varies by location. Topography, traffic density, and driver demographics all contribute to the variations. For example, those who commute on dangerous roads or drive around bars have high accident risks that might lead to high insurance rates.

Coverage

Personal auto insurance does not cover claims that commercial use of the vehicle might trigger. For example, personal car insurance might not compensate you if you are involved in an accident while delivering client orders. Thus, you need commercial insurance if you use your car for business purposes. Commercial car insurance usually costs more than personal car insurance.

Income

Lastly, different jobs attract different incomes. Your income reflects how likely you are to file a claim, especially small claims. For example, high-income earners will likely fix small damages out of pocket. Thus, your high-income job may attract low insurance rates.

The good news is that you have several ways to manage your auto insurance rates. You can lower your accident and theft risks and maximize your discounts. Talk to an insurance agent to discuss your automobile policy.