Do car insurance companies check employment status?

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Things to Remember...

  • Insurance companies do not typically ask for employment information, but they may for some specific reasons
  • You may need to provide employment information to qualify for discounts regarding your employment, or to validate your identity or contact information
  • Some insurance providers may base your premiums partially on your income since this is a factor in your ability to pay your premiums

To be considered for insurance, there is a certain amount of information that most insurance providers need to process your application.

They need to establish who you are, where you are located, and they must have access to your driving record to make a valid decision on your premium amount. Many factors go into this ruling so the more information they have, the better.

Here are the basic types of information that insurers usually ask for when you apply:

  • Name, age, address, and date of birth
  • State of residence, make, model, and type of car being insured
  • Social security number and other identifiable information
  • VIN number of car (can usually be done by the insurer online)

While they do not normally ask for employment information, in some cases, it is required. If you do not want to provide information regarding your employment, or if you are currently unemployed, simply tell the insurance agent this when you apply.

You can get insurance without verification of employment, but you may need other information to verify your identity.

Also, if unemployed when you apply, you may be looking at higher premiums until you get a job.

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To Qualify for Discounts for Professional Status

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One example of when an insurance company might ask for employment information is to qualify you for an employee or professional discount.

Companies like Geico, Liberty Mutual, and others allow for discounts if you work in certain professions such as civil defense, county government, or even education in the public schools.

If you apply for this discount, you will need to supply adequate information to prove that you qualify for this discount.

The types of data they may need include:

  • Your title or status in the company or organization
  • How long you’ve been with the company
  • Your estimated salary or wages (on average)
  • Address of your employment
  • Supervisor’s name

The Amount of Information Depends on the Company

Not all companies will ask for all of this information. However, this depends on the amount of the discount you are applying for and the types of careers the company honors.

Geico started as a government employee company in Washington D.C. and only allowed you to be covered if you worked in a government job.

Since their beginning, however, they have opted to include a wide variety of other careers, including self-employment and entrepreneurship. Other companies have also offered this and continue to do so. Inquire about this with our online agent when you get your quote.

Another reason an insurance provider might ask for your employment records is if they feel you are not telling the truth or to validate your identity.

Due to the recent concerns over illegal immigration and terrorism in the U.S., all companies have had to exercise due diligence regarding transactions with unidentified persons of any nationality, including the U.S.

If the company needs more information on you or needs to validate your contact information, they may ask for your employment information as well.

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When Your Premium is Partially Based on Your Income

In some cases, your premiums are based in a small part of your income. Insurance providers, like any other company, have to consider the income-to-debt ratio and your overall ability to pay.

They need to keep premiums paid each month to keep their reserve stable for all customers.

While most companies deny that they base premiums on income, Forbes Magazine has an interesting article which explores many factors that can influence premiums.

Based on this information, it’s easy to see how employment could be figured in as a factor.

Be Honest with Insurers

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No matter what the situation, you must always be honest with insurance companies. Lying on any part of your application, during a claims filing process, or any other context constitutes insurance fraud.

Insurance fraud is a serious offense and can carry both civil and criminal penalties.

Being honest with insurance providers is the ethical thing to do, besides being required by law. Aside from that, it is also to the benefit of all customers of the insurance company that everyone is honest.

If even one person lies on a claim form or application, it can affect the overall insurance premiums of everyone on the policy, in theory. You may not see these results for a long time until the insurance company sends a notice to all of its customers that rates have been raised.

These external factors can influence your premiums, so it is to everyone’s advantage that you remain honest with your insurer.

The best way to make sure that you get the best insurance plan for your needs is to shop around and compare. Talk to the online agent and ask for a free quote.

Then get your information together before you apply. It will make the application process much easier if you have everything ready ahead of time.

Look at the Fine Print

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By asking the right questions and comparing the different policies, you will have a better understanding of which company and coverages will best meet your needs. Start by browsing the site and ask your online representative to help.

Providing your employment information may speed the process along a bit faster when applying for auto insurance. While it is not always required, it helps the insurance companies identify you more quickly and aids them in the application process.

It can also help you qualify for discounts that you might not otherwise have access to.

Remember, whether it is during the application process or a claims process, it is best to be honest and straightforward with the insurance company to get the best deals possible from the company that you choose.

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