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How where you live impacts you car insurance

Written by Elizabeth Rivelli
Written by Elizabeth Rivelli
<h5>Edited by <a href="https://rateretriever.com/about/alyssa-dicrasto/"><span style="text-decoration: underline;">Alyssa DiCrasto</span></a></h5>
Edited by Alyssa DiCrasto
Edited by Alyssa DiCrasto
Published on 2024-01-24

Read time: 3 min

There are many factors that affect the cost of car insurance, but where you live is one of the most important. Car insurance premiums vary depending on your state, city, and ZIP code. Some of the location-specific factors that can impact premiums include weather risks, the number of uninsured drivers, the population density, and the traffic accident rate.

Before you purchase car insurance, it can be helpful to understand what you might pay based on your location. In this article, we’ll explain how where you live affects your car insurance costs, and look at the average car insurance rates in some locations.

Does where you live affect car insurance?

Out of the many factors that impact your car insurance rates, where you live has a major impact on your individual auto insurance premium.

For example, if you live in a state with a high-risk of hurricanes or tornadoes, you could pay more for car insurance than someone who lives in a state with few weather risks. Similarly, if you live in a neighborhood with a high rate of vehicle theft, your insurance premium will probably be higher than if you lived in an area with fewer thefts.

In addition to the weather risks and vehicle theft rates in your location, your insurance company might also look at the overall population density, the number of uninsured drivers in the state, and the number of accidents or claims that occur in your city or county.

In general, areas with fewer risks for drivers and their vehicles have lower average insurance premiums. In places where there is an increased likelihood of claims, whether through accidents, thefts, or non-collision damage, like flooding or wildfires, insurers usually charge higher rates for coverage.

Because car insurance rates will depend largely on where you live, it’s important to get car insurance quotes from several companies before you purchase a policy. The first car insurance quote you get might not be the lowest rate available for your location and situation. To start getting quotes, you can take our short quiz to see how much you can expect to pay for car insurance.

How the state you live in affects car insurance

Car insurance rates are different in every state. Insurance companies consider a variety of state-specific factors, like weather and minimum coverage requirements, when setting premiums. To find the most affordable car insurance rates in your state, it’s helpful to compare quotes from a few providers.

Factors that impact car insurance at a state level

There are many factors that impact car insurance at the state level.

Minimum Coverage Requirements

First of all, the legal requirements for the kind and amount of car insurance required for all drivers are set at the state level. In states with high minimum coverage limits, car insurance premiums tend to be more expensive. This is also true in some states that require personal injury protection (PIP) in addition to liability insurance.

Rating Plan Approval

Additionally, the rating plans that insurance companies use to calculate their rates are approved at the state level. Rating plans detail how each carrier calculates premiums using factors such as location, age, gender, and driving record, and they ensure that insurance premiums are both fair and competitive. Because rating plans are approved by the state, insurance companies may be approved to charge the same driver profile differently across state lines.

Rating Laws

States also have different laws around what factors can be used to calculate rates. For example, in California, Hawaii, and Massachusetts, companies are prohibited from using credit score as a rating factor. In addition, insurance companies can’t use sex as a rating factor California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania.

Additional Factors

Other state-specific factors that may impact the cost of car insurance include the overall number of uninsured drivers in the state and the cost of car repairs in the state. If you live in a state where vehicle repairs are very expensive, car insurance premiums are often higher because insurers are required to pay larger claim settlements.

Car insurance rates by state

The national average cost of car insurance is $1,824 per year. If you’re in the market for car insurance, it’s a good idea to look at the cost of car insurance by state. According to our analysis of recent rate data, New York is the most expensive state for car insurance and Vermont is the least expensive state.

How the city you live in affects car insurance

In addition to your state, you will also see different car insurance rates by city. You might find that the average car insurance rates in your city are higher or lower than the average rates in the next city over. There are several important city-specific factors that insurers use to calculate premiums in each location.

Factors that impact car insurance at a city level

Some of the biggest things that impact car insurance rates at a city level include traffic patterns and road conditions. For example, if you live in a city that has poorly maintained roads, it could lead to higher instances of vehicle damage. As a result, insurance premiums might be higher compared to a city with better roads.

Similarly, the traffic patterns and overall traffic density in the city can impact rates. If you live in a city like Los Angeles or Chicago, where there are millions of drivers, car insurance rates could be higher due to the increased likelihood of an accident or other incident.

The weather can also affect car insurance rates at the city level. Cities that have severe weather patterns generally have more expensive car insurance rates. For example, if you live in a hurricane-prone city like Miami, you could pay more for car insurance than a driver who lives in a lower-risk city in Florida.

Car insurance rates by city

Car insurance rates can vary significantly depending on your city. The only way to know exactly how much you will pay for car insurance in your current city is to get personalized rate quotes. To find the cheapest coverage possible, you should get quotes from several insurance companies. Some insurers may be cheaper than others in your city.

If you’re planning to move to a new city, it’s a good time to re-shop for car insurance and get new insurance quotes. You might find that your current insurer may not offer the most affordable coverage in your new area. Anytime you move, whether it’s to a new city or state, getting new car insurance quotes will ensure you’re getting the best rate for your situation and location.

Fetch the best rates for the right coverage near you, no sign up required!

How the zip code you live in affects car insurance

The last location-specific factor that can affect your car insurance premium is your ZIP code. The cost of your car insurance policy may be different from a friend or family member’s rate in a nearby ZIP code. Car insurance rates by ZIP code can vary dramatically depending on a variety of factors.

Factors that impact car insurance at a zip code level

There are several important factors that can affect car insurance rates at the ZIP code level. This includes the population density and the amount of crime in the area. If your ZIP code has a very dense population, or if there is a fair amount of crime and vehicle thefts, you can expect to pay higher rates for coverage.

Another factor is the history of claims in the area. For example, if thousands of drivers in your ZIP code have filed wildfire-related claims in the last several years, insurers might be charging higher rates in that area. When insurers are required to pay settlements to many people in one ZIP code, they often raise rates to offset their losses and the future risks of insuring people in the area.

Car insurance rates by zip code

Car insurance rates will differ between ZIP codes. However, the only way to know how much you will pay for car insurance in a specific ZIP code is to get personalized rate estimates. In addition to your ZIP code, insurance companies look at rating factors like your age, gender, credit score, vehicle type, and driving record to calculate premiums.

Frequently asked

Is insurance more expensive depending on where you live?

Yes, the cost of insurance is directly correlated to where you live. If you live in a place with extreme weather patterns, a high population density, or a high crime rate, you can expect to pay higher rates than someone who lives in a lower-risk area.

How does your address affect your car insurance?

Because your city and ZIP code can impact your car insurance rate, your address will affect your car insurance premium. If you live in a safe neighborhood with a low population density and few weather risks, you will likely pay less for car insurance than someone who lives in a riskier area.

What state has the most expensive car insurance rates?

Drivers in New York pay the highest rates for car insurance in the country. The average car insurance premium in New York is $3,173 per year. To compare, the U.S. national average cost of car insurance is $1,824 per year. That means New Yorkers pay roughly 54% more for car insurance than the average American.

What are 3 factors that lower your cost for car insurance?

There are many factors that can lower your car insurance costs. However, the three biggest factors are your location, your driving record, and your credit score. If you live in a safe area with low crime and few weather risks, you will likely have a lower car insurance premium than what is average. Similarly, if you have a clean driving record and a good credit score, your car insurance premium will probably be below average.