What's my address got to do with my auto insurance rate?

The RateQuote Team


When auto insurance companies are determining your rate, they’re not just looking at obvious factors like your driving record and the type of car you drive. One of the first things they’ll ask is where you live — and your zip code can have a major impact on your premium.

It may seem like where you rest your head at night has nothing to do with your time on the road, but insurance companies can use data from your specific geographic area to determine risk factors ranging from the number of claims and stolen vehicles to damaging weather patterns in your neighborhood.

In general, you’ll pay more for auto insurance if you live in an urban area as opposed to a rural area. That’s because traffic and congestion often lead to more accidents and claims in cities. Depending on the neighborhood, there may also be more reports of vandalism, stolen vehicles, and fraudulent claims that can make your own rates skyrocket. Even in a city, rates can vary widely from one neighborhood to the next. It’s all about the claim history in each area.

You may have heard that you can get lower rates if your home has a garage, but the truth is, you could benefit simply from living in a neighborhood where homes are more likely to have garages. This can be due to a decrease in claims from those garage-kept cars as opposed to cars parked on the street or in a parking garage, which can by riskier.

Of course, at a higher level, auto insurance rates will vary widely based on your home state. Statewide regulations and requirements (like whether your state is considered no-fault or requires Personal Injury Protection) can mean a difference of hundreds of dollars.

Few people would be willing to move in order to lower their auto insurance rate, but it’s useful to know all of the factors that are influencing your premium — whether you can control them or not. And if you happen to live in an area with higher premiums? It’s more important than ever to do everything in your power to get the best auto insurance rate you can.

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