How Your Address Affects Your Car Insurance Premiums

car parked in front of home

Did you know that where you live affects your car insurance premiums? This fact emphasizes the need for accuracy when providing your personal information for a quote as well as the importance of updating your information if you happen to move. Here are some of the reasons why your address matters to car insurance providers.

Local Traffic

Where you live gives car insurance companies an idea of what your commute looks like. If you live in an area known for heavy traffic or frequent accidents (perhaps there’s a particularly dangerous intersection just a few blocks from your house), then your car insurance rates could be higher than someone who lives in the country or an area where there is very little traffic. Insurance companies periodically look at the number of accidents reported by police in your area as well. If the number of reported accidents has gone up or down, your car insurance premiums may be raised or lowered to reflect this.

If your commute to work each day takes longer than 15 minutes, that can raise your car insurance premium as well. The thought behind this is that the longer you are on the road, the more risk you are exposed to, which leads to higher rates.

Below, we see an upward trend on average annual premium until we hit the 25+ of commuting miles segment. There could be many variables that are affecting these rates in the 25+ segment but two major factors that may be strongly attributed could be owning a home and being outside of city limits. The fact that they own a home could also indicate a better credit score which could also drive down costs.

Car Insurance Premium Commute distance

Crime Rates

Crime in your neighborhood also plays a role in how much you pay in car insurance premiums. Again, your address is used to get crime reports from local police forces so that the insurance company can assess the risk. If there are higher-than-average car break-ins, thefts, or vandalism in your area, you could be paying more than someone who lives in a more secure neighborhood. You can see a full report on the top stolen cars in the United States on the National Insurance Crime Bureau’s (NICB) website.

The Bottom Line

Car insurance companies are all about assessing risk. The best way for you to lower your car insurance premiums is to shop around and see what each company has to offer. Different car insurance companies may not assign the same level of risk to your neighborhood as others and could offer you a better rate.

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