Occupation and Education Are Not on California's Factor List

Drivers who have bought insurance in other states may expect a quote form to ask about their job title or their highest degree. Others notice a California company asking where they work and assume it is pricing their profession. Neither reaction quite fits the law, which treats occupation in a narrow and specific way.

The list is closed

Insurance Code section 1861.02 says rates are determined by the three mandatory factors and "those other factors that the commissioner may adopt by regulation and that have a substantial relationship to the risk of loss." The same section adds that using any criterion without approval "shall constitute unfair discrimination."

The optional factors adopted in 10 CCR 2632.5 are: type of vehicle, vehicle performance, type of use, percentage use by the rated driver, multi-vehicle households, academic standing, driver training, vehicle characteristics, marital status, persistency, non-smoker, secondary driver characteristics, multiple policies with the same or an affiliated company, and relative claims frequency and severity by garaging location. Occupation is not there. Neither is education level.

Academic standing is a different thing

Academic standing is on the list, and it is easy to confuse with education. The regulation names it without defining it, and it is the natural home for student-grade credits. A completed degree is a different fact, and the regulation does not treat a diploma as a factor. A thirty-five-year-old engineer and a thirty-five-year-old who left school at sixteen are rated on the same allowed factors.

Where a profession can legitimately show up

Insurance Code section 1861.12 is short: any insurer may issue coverage on a group plan "without restriction as to the purpose of the group, occupation or type of group," and group rates are not unfairly discriminatory if they are averaged broadly among the people insured under the plan. The Department of Insurance's class plan instructions describe each group program as carrying its own approved rates.

So a company can have a plan for members of a professional association, a union, an employer or an alumni body. That is a different mechanism from rating your job on a standard policy: you qualify by membership, and the group's rates apply to everyone in it. A group plan is one company's offer to one group, which means it is a reason to get that quote, not a reason to stop comparing.

How your work does reach the rate

Your job title does not, but what your job does to the car can. Type of use is an optional factor, so a car used for business is classified differently from one used for pleasure or commuting; our page on business use covers that line. A long commute adds to your annual mileage, which is the second mandatory factor. Both follow the car's actual use, not the name of your profession.

If a form asks what you do for a living, it is fair to ask why. The answer is usually group eligibility or use classification, and either one is worth getting right. When you are ready to compare, start a quote and mention any groups you belong to.