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Insurance: What Does Your Occupation And Industry Say About You?

Fri, 27/06/2014
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When applying for motor insurance, you will always be asked about your, or the proposer’s, occupation so the underwriters can calculate an accurate premium associated to the risk they believe you present.

A person’s occupation in relation to motor insurance is a major rating factor and can affect the premium quoted (as can be seen in some of the tables below). Thinking about what it is you actually do for a living raises the question of how accurately your job role be described. For instance, a sales assistant who works in a retail shop could be described as a shop worker or as a sales assistant. When comparing the motor insurance quotation premiums for these two occupations we can see a distinct difference with, potentially, an £80 saving to be made.

Although the cheapest premium quoted for each occupation is significantly lower than the other, when we look at average cost, the variance has been reduced to just under £12.

Like postcodes and vehicles, underwriters will have different rating factors for occupation, and industry, based on previous statistical data and exposure to risk.

When looking at someone who is not in employment, but who cannot be described as retired, we can see that there is a substantial difference in the average, and cheapest, premiums quoted. As we can see from the table below, being classed as a house-person could save you over £400 due to the risk factors associated with each occupation. Unemployed drivers are deemed to be more likely to drive around looking for work; the likelihood of them being involved in a collision is higher[1].

Another industry which brings high variance in premiums is the road haulage industry. As you can see below, we compared an insurance price for HGV drivers, Lorry drivers and a Driver, the latter of which carries an average premium increase of £395.26. This can be due to the ambiguity of the job role and can be seen to be leaning towards that of courier or fast food deliver drivers, both of which represent a high risk to motor insurance companies.

Another occupation which can lead to a variance in premiums based upon the description of the role is Public House owners. From the occupations available to select, five were deemed to be describing broadly the same role and, dependent on which was selected, a saving of £74.88 was possible. However, the difference in price between a Publican and a Bar Manager may be due to the individual characteristics of the role. A Publican is likely to live in, or adjacent, to the Public House, whereas “Bar Manager” implies that the individual is employed only by the establishment and will travel to/from work. With the availability of alcoholic drinks the risk of drink-driving is ever present. Also having to drive home, usually late at night, and possibly after a long shift, means the likelihood of being involved in an accident is higher.

The industry in which you work can also have an effect upon your premium, some industries are deemed as carrying a higher risk, due to either the nature of the business, or the attitude of people who work within them. For example, if we take a quote based upon the same information as the above for a qualified physiotherapist working for the NHS and then change their industry to working for a professional sports club, we can see a dramatic incline in their average premium by £544.38.

The main reason for the substantial increase in premium, for one who works within the professional sports industry, is because of the nature of the risk which is associated with celebrities or sports professionals. There is a possibility that there may be professional sports people travelling in the vehicle with the policyholder, some of whom may be subject to multi-million pound contracts and sponsorship deals[2]. If the vehicle is then involved in an accident an insurer face a large personal injury claim, as well as a potential huge loss of earnings claim, dependent on the extent of injuries sustained.

As well as occupation, it may also be an idea to think carefully about the industry which you work in. Many occupations and industries go hand-in-hand, firefighters are usually in the fire service and police officers are in the police force etc, but many can reasonably fall within the boundaries of many occupations, and you could find yourself making a saving.

However, as with any information provided to insurers, accuracy is essential when notifying or amending your occupation. Any incorrect, misrepresented or non-disclosed, information may lead to a claim being rejected and your policy voided[3].

 

For this article Be Wiser Insurance ran a series of quotations in which the only variable was the occupation of the policyholder. The quotations were given on May 19, 2014.

In every case, the policyholder, and only driver, was a 30-year-old male, living in Worcester driving a 2010 Vauxhall Insignia 2.0 litre with nine, or more, years protected no claims discount. The average cost of an annual policy was calculated from the top ten quotations.



[1] http://www.bbc.co.uk/news/uk-16652779

[2] http://www.thisismoney.co.uk/money/cars/article-2225218/Top-expensive-jobs-car-insurance--cheapest.html

[3] http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-insurance.html

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