Does Where I Live Affect Cost of Auto Insurance?



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The short answer is Yes. If you live in an area that is more populated with drivers and more prone to crime and accidents, the cost of your auto insurance will be higher. Drivers in big cities such as Los Angeles and New York city are more likely to file an insurance claim than someone driving in Austin, Texas. Auto insurance companies will look at the zip code you live in and see what the historical claim rates are and factor that into your premium.

The same point is not only valid for urban areas but for anywhere that has more drivers on the road, even if the area is a suburb. Car insurance studies have shown, any area with more drivers and traffic, result in a high chance of road rage, tailgating, speeding, running stop signs and red lights. Road rage has not helped anyone at all either. Drivers, just be patient, a delay of 5 minutes will be a lot better than getting into an accident. Insurance companies such as All State Insurance are starting to reward drivers with no accidents.

If you live in the middle of nowhere in a rural area, your cost may be higher because your area may be faced with extreme weather and wildlife. Driving in the middle of Iowa means you may have to deal with torandos, bad storms and wild animals running onto the highway and road. An average accident with a wildlife results in about $2,00 worth of damages that insurance companies have to cover, if the animal was moving.

The crime rate of your area also plays a big role in the cost of auto insurance. Living in Irvine, CA, will save you quite a bit of money on auto insurance versus living in Watts, CA, where most consider one of the worst areas as far as crime in Southern California.