Another Advantage of Education: It Saves You Money on Your Car Insurance

We've established that having an education is the key to getting a good job and that having a degree can mean $1 million (or more) to you in extra income during your lifetime. In other words, an education can help you earn a boatload more money!!

But it gets even better. Now advanced education can also help you SAVE money as well -- at least on your car insurance. Here are the details from Money Central:

In states where rating factors can legally include education and occupation, insurers such as Allstate and Geico are now charging drivers with the right kind of jobs much less for insurance.

Allstate discounts premiums by up to 10% for those in its favored jobs. Geico simply charges the less educated more.

As you might imagine, there are a lot of people that are upset with these practices, claiming that they are unfair to the uneducated (who are also usually poor). But it gets down to a business decision for the car insurance companies -- if more educated people have fewer accidents, then they should pay less.

But some companies don't see a correlation between education and accident rates. Or maybe it's just too hot of an issue for them. Anyway, here's what other car insurance companies do:

State Farm, the largest car insurer in the country, doesn't use education or occupation to set rates, said spokesman Dick Luedke. The No. 3 insurer, Progressive, also refrains, said spokesman William Perry.

I'm not going to comment on the right-ness or wrong-ness of setting car insurance rates by education. We'll leave that to one of the political blogs. However, I can say that from a financial standpoint, it appears that education can not only help you earn more, but now can also save you money to boot!

Comments

[Starfevre]

Wait, I just signed up for State Farm a month ago. They did give me a discount for my occupation and required a photocopy of my degree to prove it. So either that spokesperson or my state farm guy is not being entirely truthful.

[Blaine Moore (Run to Win)]

I'll have to call my insurance carrier up and find out if I can get that discount...thanks for the tip.