How Do Zip Codes Affect Car Insurance Quotes?

There are a few factors that affect your vehicle insurance costs. Some of them are more influential than others. Insurance is all about pricing risks of having to pay for claims arising from insured perils. As companies don’t employ fortune tellers to see the future they have to look at other indications of risk.

The obvious indicators are the age of insured drivers, their driving history and claims records, statistical and safety records of the car to be insured, credit score of the policyholder and the statistical risk indicators of policyholder’s resident address. A few more indicators can be listed here but these are the most influential factors.

Why Policyholders’ Home Addresses Are Important?

location and vehicle insurance costsNaturally, people drive mostly around their neighborhood. At least they go to work from home and come back almost every day. In addition, they park their car near home overnight. Statistically, large numbers of accidents occur near home. So, companies have to look at what is happening in your immediate area. They look at congestion, parking facilities and auto crime before they decide what to charge.

How the State You Live in Influence Your Premiums?

Your state minimum auto insurance requirements, regulations and laws are of a concern as well. Sometimes, these laws can be prohibitive enough that some insurers may decide not to underwrite business in a certain state. It may appear that minimum liability insurance requirements may be the real reason for the premium differences. However, this is not really true as states that have much higher minimum requirements are not really the expensive states. It is more about how costly it would be to insure a vehicle in your state as a result of accidents, auto crimes, weather related damages, medical costs for injuries and compensations rewarded in courts for injured people.  It is statistically well documented that it is much more expensive to insure automobiles in certain states in America.

How Much Your Zip Code Affects Auto Insurance Rates?

This totally depends on where you live. Moving from a sleepy hamlet to a big city like Los Angeles can easily triple your rates. So much so that some people commit insurance fraud by giving different address than their actual address in the city center. Furthermore, some zip codes may be considered a danger zone by most insurers due to high concentration of crime in low income neighborhoods. This has been a hot topic recently and some neighborhoods started campaigns to challenge the way insurers evaluate the risks based on their zip code.

The impact will be much more obvious when we look at how other factors affect your rates. For example, you may get about thirty percent discounts for having a great driving record. This hard earned discount would be dwarfed by how much the costs can go up based on your city zip code. However, good driver discounts would be a lot more valuable in such zip codes.

How to Lower Car Insurance Rates in High Cost Zip Codes?

If you have looked at the premiums before you moved and has chosen a cheaper insurance zip code it is great. The fact is that people don’t normally choose where to live based on insurance costs. Therefore, it can be considered as an external factor affecting your premiums. Here are a few things you could do if you live in an expensive automobile insurance rates zone.

  1. Choose a Cheap to Insure Automobile

Quite a few motorists choose smaller, cheap to insure autos in cities. They have other advantages like easy parking and efficient fuel costs. City centers are worse for fuel consumption because of the stop and go type of congested traffic. Obviously, if you still want to keep your big 4×4 in the city you will have to pay as much as twice more premiums.

  1. Look for Private Parking

Auto theft, crime and vandalism are some of the reasons for expensive premiums. When your car is parked safely in a garage or private parking lot the chances of it getting stolen or scratched is much lower and this will save you money when insuring automobiles. You can find out more about parking and auto insurance and answers to questions like do parking tickets affect insurance by following the link.

  1. Keep Your Driving Records Clean

This is much harder than just saying as there are a few more speed and red light cameras in the cities than countryside. Therefore, it is extra important to be careful not to get done for speeding. Actually, you may even want to cheat by utilising a mobile app that will tell you where those speed cameras. It is something quite a few motorists do.

  1. Avoid Claims

What is one can do about an accident? There isn’t much you can do except making a claim when you have large losses. However, the numbers of those big accidents or losses are limited. Most of the accidents and losses are negligible and people submit millions of small claims across the country. Many policyholders think that small claims won’t matter much. The fact is that having number of small claims can increase your premium a lot more than having one large claim.

That is why it may be smart to put your hands into your pocket to pay for small and controlled damages. Isolated incidents that don’t involve other drivers, road users and property owners are good examples for these. Many policyholders would be happy to get the repairs done themselves if they scratch the car when coming out of their garage. Avoiding making small claims is under appreciated especially in expensive zones.

  1. Shop Around for Better Quotes

Every company looks at the above discussed risks differently. For example, company A may offer you up to twenty five percent discounts for having good credit score while Company B doesn’t care much about credit history. So, you should never settle for the first quote you get but shop around for the best deal by getting several quotes. The premium difference between the most expensive and cheapest quote can be as much as couple of thousand dollars.

As you can see you can reduce to costs of insuring your automobiles regardless of where you live. You should remember that the higher the premium the larger the savings you will get in terms of dollars.

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