Sometimes it is difficult to understand what insurance companies take into consideration when deciding the cost of a person’s car insurance. We do know that recently the EU passed legislation stating that car insurance providers could no longer give lower premiums due to a person’s gender, even though insurers claim that female drivers are often cheaper to insure as generally they are involved in fewer serious accidents.
However, there are some things many of us assume, such as that if you have had a previous accident your car insurance premiums will be more expensive compared to someone who has never been in one. However, a study in America has shown that this isn’t always the case, and that occupation and education have more influence on the amount of car insurance premiums than previously thought. We have already heard that in the UK it could be cheaper for women to insure their vehicles if they are married, but now it seems that where you work could also have a massive impact.
In the study conducted by the Consumer Federation of America (CFA),they created two fictional women, both thirty years old, who lived in a middle class areas, and had been driving for ten years. The first woman was a receptionist, who was single and had never been in a car accident, yet had been without car insurance for 45 days before getting the quote. The second was a married corporate executive with a masters degree and an insurance policy that never lapsed, however had previously been in an accident that was her fault and cost $800 worth of damage. The results showed that even though the first woman had never been in a crash, her insurance premiums were on average 25% higher in two thirds of the quotes they received, and it was believed that this was due to her occupation.
Even though the data gathered considers American drivers and car insurance providers, it could also bring some insight into the way that insurance quotes are calculated here in the UK. The CFA’s Director of Insurance and former Texas Insurance Commissioner, J. Robert Hunter said in the study’s press release: “State insurance regulators should require auto insurers to explain why they believe factors such as education and income are better predictors of losses than are at-fault accidents. This damage can be considerable since all states but one require drivers to carry auto insurance, and most Americans need a car to pursue work opportunities.”