Where you work can change your insurance quote

Posted at 6:54 PM, Oct 18, 2017

You expect to pay more for car insurance if you have an accident, but you may not realize you could be paying more for insurance based on your job.

Candice Lewis is a stay-at-home mom raising two energetic boys, and considers herself a responsible person who never thought that her job could have an effect on what she pays for insurance.

She visited GEICO's website to compare rates. She entered her basic personal information including her profession as a homemaker.

She got a quote for basic insurance to start right now for her SUV for $198.

But then, instead of managing her family, she said she was a lawyer.

"$171, that's terrible, I'm offended," says Lewis.

Something similar happened when she tried Progressive Insurance too.

Rachel Stack has a college degree and makes drinks part-time. When she asked for a quote and put bartender in she got a quote of $93.

But if she gave up slinging cocktails for being a teacher, her price dropped to $80.24,  saving $13 a month and $156 a year. 

"With same education, same everything. That's ridiculous," says Stack.

Lawyer and insurance expert Eric Poe says richer people bring more money overall to the insurance company so they get lower rates.

"Higher income people tend to buy more insurance because they have more assets to protect, he said." 

"So if I can get in your door from a car insurance perspective, which is already mandated -- which everybody shops around every year -- I'll have the opportunity to sell you homeowners insurance and if you're really wealthy, I can sell you boat insurance and I can sell you motorcycle insurance and I can sell you ski-doo insurance."

People with more disposable income are less likely to file a claim, he says, meaning wealthy people cost the insurance companies less.

"When there is a fender bender that's $2,000 or $3,000 those people actually go in their savings account and pay $2,000 or $3,000 to fix their car because they don’t want their insurance rates to go up by filing a claim."

A news producer for Scripps entered in that he is unemployed, and was told his monthly rate would be $183. If he flipped burgers, it would be $128. If he was out fixing leaky pipes, he would pay $119.

One of the lowest, $112 for teachers and lawyers.

The lowest are doctors at $77.

Poe says all of this is legal because no states have passed regulations to stop it.  If you're thinking of fudging the truth a little bit and lying on your application, that is illegal.

"So if you do that, theoretically -- by law -- you'd be committing insurance fraud. Insurance fraud in most states has significant penalties and they will prosecute you," Poe said. "Not to mention they'll deny your claim." 

Not all insurance companies base rates on your job. The ones that do insist it's just one factor they consider of many.

State Farm said it doesn't factor in your job at all. Farmers says it offers discounts for certain professions.

GEICO, the insurer with the biggest gaps between quotes, have not commented.

One thing insurance companies can't do is use your actual salary to set your rates, so this appears to be a way around that.