Car Insurance Premiums: What’s Your Address Got To Do With It?


Plenty. Insurance companies base their rates on the probability of something happening. When the quote is for car insurance, the company is specifically concerned about the likelihood of theft, vandalism and accidents. They’re also going to take into consideration the distance you commute to work, whether you live in a highly populated city or a rural environment and whether your area has a reputation for being suit-happy. They may even take a look at the weather conditions.

From an auto insurance provider’s point of view, if your area racks up more car thefts than the acceptable national average, you’re going to rack up higher premiums. Bottom-line, if your car insurance company thinks where you live increases the odds your car will be stolen or vandalized, they’re going to cover their potential losses by charging you a higher car insurance premium.

Big, densely populated cities tend to have more accidents, too. Think about it: more people spending more time on the road in rush-hour and other high stress conditions. To an auto insurance company, that’s a recipe for more accidents and a reason to charge higher car insurance premiums.

But before you move to the ‘burbs, you should also know that auto insurance companies may add on premium points for the length of time it could take a cop or emergency medical service providers to reach the accident scene. Are the roads notorious for potholes? That can cost you, too.

Do you live in Suit City, U.S.A.? Car insurance companies are going to pad your premium to protect themselves from known ambulance chasers.

Does it snow or rain a lot where you live? Does the fog roll in and hang on? Car insurance companies equate nasty weather with impaired driving conditions, which leads to a greater opportunity for an accident, which bumps your premiums up.

Not fair, you say? There are a few things you can do that may lessen the impact of a high-risk location. Install a top-notch auto theft device, preferably one that directly alerts law enforcement and park your car in a security-patrolled garage. Move to a suburb with great law enforcement and well-maintained roads. Or shop around for a lower auto insurance rate.

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