Job titles can make a big difference to the premium an insurer charges for motor insurance.
For example, a 2007 study by Confused.com found that, all other factors being identical, a barrister would pay £459 for a policy that would cost a publican £294. Bear in mind this is for the same car, so it's not just a case of the barrister having a more expensive vehicle.
Does this only affect motor insurance?
It's only motor insurance where this makes such a difference. There are some other forms of insurance where it is an issue -- for example, a professional stuntman may well pay more for medical or life insurance -- but generally it's not an issue with most other types of insurance.
What's the logic behind it?
As with all forms of insurance, insurers look to use as much reliable data as possible to assess risk: their aim is to be able to offer the lowest premiums possible while still taking account of the risks and thus making an adequate profit overall. How reliable the job title data really is is open to question, but it's worth remembering that individual behavior makes a real difference in motor insurance. Two people who both take similar care of security for home insurance and general health for medical insurance may drive in very different ways.
Isn't it a little unfair to stereotype like this?
Possibly, though the data is based on actual claims rather than perception. Remember that it doesn't just take account of driving skill, but also factors such as how much you drive (the publican mentioned above is usually busy for most of the day and may well live at the pub where they work) and even how likely they are to be in a hurry (such as a reporter.)
What can I do about this?
While it's illegal to lie about your job, there are ways to take advantage of the system. Often insurers have so many job categories in their system that two or more could apply to the same person. And many of us perform less defined roles these days. It's thus well worth trying out a couple of different possibilities on a price comparison site before making a formal application.
Is this legitimate?
The question is whether the information you supply is true. So, for example, if you list your job title as "butcher", what matters is whether you can truthfully call yourself a butcher, not whether this is the single most accurate description available.
One way to test this issue is to consider whether you could use the job titles to describe yourself to a stranger at a party without feeling you were being misleading. So, for example, a reporter could reasonably describe herself as a journalist, but it wouldn't be fair for a security guard to call himself a policeman.
PLEASE NOTE: The guidance published in this article is for information only and does not constitute financial advice or a recommendation of any particular car insurance product or company. If you are in any doubt please consult an independent insurance adviser. A database of advisers in your area is available at www.unbiased.co.uk
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