Why ‘the job’ Matters

How important are the occupation and education questions?  Do you fill those out when you are visiting with the insured?  As an underwriter, I can tell you this is perpetually missing information.   It may not matter to some, but others use this information as part of the rating matrix.

Businesswoman's Head Surrounded by Life Work Money Symbols

According to the Wall Street Journal, in New York, regulators are asking a couple of the larger carriers why they charge more for some occupations and less for others.  To quote, “their math shows professionals such as military officers, teachers, engineers, accountants, and dentists have lower claims costs and therefore should pay lower rates. Unskilled workers such as day-care employees and stock clerks have a higher risk, according to some actuaries.”  (http://www.wsj.com/articles/car-insurance-firms-could-be-banned-from-asking-what-you-do-for-a-living-1479308820)

I could not agree more.  In my own opinion, if we can discriminate against gender, age, and marital status, why would occupation be different?  Besides, the car is going to see more risk if our insured is a real estate agent than if they are the local ice cream shop owner.

This most likely applies to males.  After all, they face the most discrimination from the insurance company.  Unmarried males under the age of 25 – pay higher rates than the rest of us.  Our society is not ignoring the science socially.

If you read Steve Harvey, guys who have a path and a focus are more likely to be married, own a home, and have success.  Those with a job are more responsible than a guy without a job.   Shouldn’t they be rewarded with lower premiums?

The other piece of this is education.  There are still carriers who give discounts to insureds who are college graduates.

Places everywhere and in between will ask you education level.  You could apply for a stock person and they will ask.  Why, because educated, college graduates have a tendency to be more adjusted than those who are not.  I had a hiring manager tell me once that he would only select the college graduates because he knows full well they have the crazy out of their system. It shouldn’t be a surprise to any insured that we would ask as well.

Given some states like Massachusetts already disallow using occupation and education as rating, if the law passes in New York, look for other states following suit.

What are your thoughts? Do you have any discount ideas?

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