Understanding the impact of zip code on car insurance rates

Katie Dee on 2023-11-15

Understanding the impact of zip code on car insurance rates

Written by Katie Dee

Published on 2023-11-15

Read time: 3 min

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Is your state expensive for car insurance?

Subaru is the cheapest popular brand for car insurance

How to save money on car insurance in California

According to Rate Retriever’s Auto Insurance Rates Quarterly Update, the most expensive U.S. zip code for car insurance in 2023 is in Brooklyn, NY. Drivers in the 11233 zip code have an estimated average annual premium of $5,512, almost $3,690 higher than the national average of $1,824.

On the other end of the spectrum, the cheapest zip code for car insurance in 2023 was in Essex Junction, Vermont. The average annual premium for the zip code 05452 was $1,008, more than $800 less than the national average.

So, why does zip code matter for car insurance and why are some so much pricier than others? We are here to help you understand the answers and what they can mean for your own car insurance premium.

Is your state expensive for car insurance?

Subaru is the cheapest popular brand for car insurance

How to save money on car insurance in California

Why zip code factors into car insurance rates

Typically, insurance companies try to have more money coming in from premiums than they are paying out for claims. Because of this, when they are determining how much a premium will be, it is largely based on the amount of risk the policy introduces to the provider.

If a zip code is in a crowded metropolitan area with a higher rate of theft, premiums will most likely be higher since there is a greater risk of the policy owner filing a claim. Conversely, if you live in a zip code belonging to a more rural area with less cars on the road and lower rates of theft, your rates will typically be lower.

Additionally, car insurance companies will analyze the history of claims that have been filed in certain zip codes to determine the risk. If the zip code you live in has an above average rate of insurance claims, car insurance underwriters will issue higher premiums for that area.

To put it simply: the higher the likelihood of you filing a claim in a certain zip code, the higher the premium associated with that zip code will be.

How to control your car insurance rates in an expensive zip code

Even if you reside in a higher risk zip code, there are options for you to control your car insurance premium. The most effective way to be sure you are not overpaying is to compare rates from multiple different car insurance companies, which you can do through our short quiz that helps you find savings in 30 seconds.

Another method for lowering car insurance rates is to take a defensive driving course. Many car insurance companies offer discounts to drivers who complete these courses because brushing up on safe driving tactics typically leads to filing less claims.

Maintaining your credit score can also help to save you money on car insurance in most states. Currently, California, Hawaii, and Massachusetts are the only states in the U.S. that do not use credit score as a factor in car insurance rates.

There is evidence that suggests that credit score is an indicator of how likely a driver is to file an insurance claim, and car insurance companies consider this when setting your rates. Rate Retriever’s report found that drivers with excellent credit are spending 17% less on car insurance premiums while drivers with poor credit are spending 84% more on average.

Lastly, raising your deductible could help save you money on monthly car insurance costs. Keep in mind, the higher your deductible, the more you will owe before your car insurance kicks in if you ever need to file a claim. Raising your deductible will lower your annual premium, but it could also result in you spending more money in the long run, so this may not be the right option for everyone.

Frequently asked

How does the insurance company determine my rate?

Car insurance companies determine how much they charge you based on your driver profile. Factors that can impact your rates include:

Demographics – your age, home ownership, credit score, and more
Your driving history – how long you’ve been driving, traffic violations, and more
Your car – make, model, and year
Where you live – state and zip code
How much coverage you want

How do I switch my car insurance?

Switching your car insurance is easy, even if you are in the middle of your current policy.

Here are some helpful tips to consider to switch your car insurance:

Decide what coverage you want with your next policy
Check if your current provider charges cancellation penalties or fees
Compare prices from at least 3-5 insurance companies (Rate Retriever makes this easy, giving you personalized rates from the top companies near you)
Get a final quote from at least one of your choices
Cancel your current policy once your new one begins

How much car insurance do I need?

The answer to this question depends on where you live and what you would like to cover.

Each state has its own minimum requirements on the type and amount of insurance needed. When you’re trying to determine what and how much car insurance you need, you can start by reviewing your state’s requirements.

Find out what’s required in your state

Once you review your state’s minimum requirements, you may find that you want additional coverage. For example, sometimes owners of new cars want comprehensive coverage to insure their car from natural disasters and vandalism, even though comprehensive coverage isn’t required by their state. To figure out what insurance you want, you can review the different types of insurance to decide what makes the most sense for your situation.

Learn about the different types of car insurance

How is Rate Retriever different than other insurance websites?

The biggest difference between Rate Retriever and other comparison sites is that we are a free and impartial research tool NOT an insurance marketplace. This means you can’t purchase a policy directly through RateRetriever.com, but you can use our tool to independently research your options and seamlessly connect with the provider you choose.

Unlike other insurance comparison sites, we:

Use third-party data to give you more accurate rate estimates instead of inaccurate, suspiciously low quotes to get you in the door
Do not limit your list of results to paid advertisers
Do not collect your email or phone number before we let you see your results
Give you results after just five questions (however, your results will be more accurate if you complete your profile)

We like to think that Rate Retriever is your insurance companion, not just another insurance comparison site. Our values guide everything we do, which is why we strive to offer transparent, trustworthy insurance tools.

Read more about Rate Retriever

How can I get cheaper car insurance?

There are many ways you can try to get cheaper car insurance. The first is simply to get quotes from multiple providers. This will help you determine if you’re currently receiving the cheapest rates based on your needs and driver profile. Rate Retriever makes the comparison process easy.

Sometimes, the reason your car insurance is so expensive is due to your driver profile. For example, drivers under 20 years old usually pay more for insurance than more experienced drivers, and drivers with a recent at-fault accident or traffic violation typically pay more.

There are ways to lower the cost of your insurance such as taking a defensive driving course. Check with your provider to see if there are any discounts you qualify for or can reasonably earn.

How does Rate Retriever make money?

Rate Retriever works with national and local insurance providers to provide our users with a seamless insurance shopping experience. We may earn a commission from our insurance provider partners when you click on a link, call, or purchase a policy from one of the providers listed on our site. That said, we’re committed to providing you with accurate, bias-free information, and we do not allow our partnerships to limit the results or influence the information we share with you.

We do not sell your personal information, charge you for using our tools, or sell you insurance policies. Additionally, should you choose to purchase a policy from one of our partners, the price you pay will not be adversely affected.

Read our full earnings disclosure

Sharing a car with your teenager can save you up to 54% on your car insurance

Katie Dee on 2023-11-13

Sharing a car with your teenager can save you up to 54% on your car insurance

Written by Katie Dee

Edited by Alyssa DiCrasto

Published on 2023-11-13

Read time: 3 min

Is your state expensive for car insurance?

Subaru is the cheapest popular brand for car insurance

How to save money on car insurance in California

According to Rate Retriever’s Auto Insurance Rates Quarterly Update, the cheapest way to get your teenager car insurance is to add them to your existing car insurance policy and share a car with them. By doing this, you can save up to 54% compared to the cost of getting them their own policy.

Is your state expensive for car insurance?

Subaru is the cheapest popular brand for car insurance

How to save money on car insurance in California

Should I get my teenager their own car insurance policy?

When your teenager passes their drivers test, you are left with several decisions to make. On top of worrying about their safety on the road, you also need to consider how you want to go about getting them car insurance.

One option for this is to get them set up with their own policy. One pro of doing this is that they will be better prepared to take over the policy themselves when they are required to get their own plan, like when they purchase a new car or move out of your home.

However, there are some drawbacks to this option, such as a more expensive price tag. Teen drivers typically have higher car insurance premiums because of the additional risk they bring to insurance companies. Since teenagers have a limited amount of driving experience, they are more likely to submit a claim, and insurance companies set their rates accordingly.

According to Rate Retriever’s report, the average annual premium for a teenager on their own policy is $7,401 a year.

Adding a teen driver to your policy

While rates will look different for every driver, adding your teenager to your existing car insurance policy is typically the cheapest way to get them insured.

Rate Retriever’s report found that the average annual premium for a parent and a teenager on the same policy who also share a vehicle is $4,189. This is $3,212 less than the average yearly premium for a teenager on their own policy.

It is also important to consider the scheduling conflicts that exist between you and your teenager prior to making the choice to share a car.

Before deciding whether or not to share a car with your teenager, take our quick quiz to compare car insurance rates in your area and find the cheapest option for you and your family.

The pros and cons of sharing a car with your teenager

The decision of whether your teenager should have their own car is one only you can make, but we are still here to help you along the way. On top of insurance savings, sharing a car with your teen will also save you the cost of registration fees as well as any unforeseen repairs or maintenance that might be needed on an additional vehicle.

Even with all the financial benefits, there are also a few downsides to consider. One of the biggest negatives to sharing a car with your teenager is the possibility of the car breaking down or being involved in an accident that lands it in the repair shop, leaving both of you without reliable transportation. It is also important to consider the scheduling conflicts that exist between you and your teenager prior to making the choice to share a car.

Before deciding whether or not to share a car with your teenager, take our quick quiz to compare car insurance rates in your area and find the cheapest option for you and your family.

Frequently asked

How does the insurance company determine my rate?

Car insurance companies determine how much they charge you based on your driver profile. Factors that can impact your rates include:

Demographics – your age, home ownership, credit score, and more
Your driving history – how long you’ve been driving, traffic violations, and more
Your car – make, model, and year
Where you live – state and zip code
How much coverage you want

How do I switch my car insurance?

Switching your car insurance is easy, even if you are in the middle of your current policy.

Here are some helpful tips to consider to switch your car insurance:

Decide what coverage you want with your next policy
Check if your current provider charges cancellation penalties or fees
Compare prices from at least 3-5 insurance companies (Rate Retriever makes this easy, giving you personalized rates from the top companies near you)
Get a final quote from at least one of your choices
Cancel your current policy once your new one begins

How much car insurance do I need?

The answer to this question depends on where you live and what you would like to cover.

Find out what’s required in your state

Learn about the different types of car insurance

How is Rate Retriever different than other insurance websites?

Unlike other insurance comparison sites, we:

Use third-party data to give you more accurate rate estimates instead of inaccurate, suspiciously low quotes to get you in the door
Do not limit your list of results to paid advertisers
Do not collect your email or phone number before we let you see your results
Give you results after just five questions (however, your results will be more accurate if you complete your profile)

Read more about Rate Retriever

How can I get cheaper car insurance?

There are ways to lower the cost of your insurance such as taking a defensive driving course. Check with your provider to see if there are any discounts you qualify for or can reasonably earn.

How does Rate Retriever make money?

Read our full earnings disclosure

New data reveals that drivers with poor credit pay almost 85% more for car insurance nationwide

Katie Dee on 2023-11-11

New data reveals that drivers with poor credit pay almost 85% more for car insurance nationwide

Written by Katie Dee

Edited by Alyssa DiCrasto

Published on 2023-11-11

Read time: 3 min

Is your state expensive for car insurance?

Subaru is the cheapest popular brand for car insurance

How to save money on car insurance in California

According to new research by Rate Retriever, credit score is one of the biggest determining factors for car insurance rates in all states besides California, Hawaii, and Massachusetts, where credit-based rating practices have been banned.

The Auto Insurance Rates Quarterly Update found that drivers with poor credit scores have premiums that are 84% higher on average than those with good credit while those with excellent credit pay 17% less.

Is your state expensive for car insurance?

Subaru is the cheapest popular brand for car insurance

How to save money on car insurance in California

Why is credit score considered in car insurance?

In most states, your credit score is one of several factors that are assessed in order to determine your exact car insurance rate. Research has shown that poor credit may be an indicator of a driver’s likelihood to file a claim while those with better credit scores are less likely to be involved in a covered accident.

Car insurance companies will look at an individual’s credit score to try and gauge how much risk would be associated with covering them. Because of the assumption that those with poor credit bring more risk, those drivers will have higher car insurance rates.

Even if you have poor credit, it is still possible to save money on car insurance. Take our quiz to compare personalized rates and find savings in 30 seconds.

States where credit score has the largest impact on rates

Since each state sets their own regulations for car insurance pricing, the impact that credit score will have varies depending on the state you live in. Currently, the state where credit scores have the most severe impact on car insurance rates is Michigan with a 158% price increase for drivers with poor credit. That is $3,511 more per year when compared to Michigan drivers with good credit.

On top of being the most expensive state for car insurance overall in 2023, New York also has some of the highest penalties for poor credit. According to Rate Retriever’s research, a low credit score can result in a 127% increase in car insurance prices in New York when compared to drivers with good credit.

The state with the third highest credit-based rate increase is Minnesota. The report showed that drivers in this state pay 114% more to insure their vehicle if they have poor credit. Comparatively, drivers with excellent credit have premiums that are 19% less.

States where credit score has the smallest impact on rates

Rate Retriever’s research revealed that among states where credit score is a factor in rating, the state that experienced the smallest impact is Washington. In this state, having low credit results in an 11% increase in car insurance premiums while excellent credit only results in a 3% decrease in rates compared to those with good credit.

North Carolina and Nevada tie for the second smallest percentage increase. Drivers with poor credit in these states only pay 40% more for car insurance than those with good credit.

However, because the average annual premium in Nevada is $2,188, individuals with poor credit in this state will pay significantly higher premiums compared to those in North Carolina where the average premium is only $1,310.

To see how credit score impacts rates in your state, read the full report.

Frequently asked

How does the insurance company determine my rate?

Car insurance companies determine how much they charge you based on your driver profile. Factors that can impact your rates include:

Demographics – your age, home ownership, credit score, and more
Your driving history – how long you’ve been driving, traffic violations, and more
Your car – make, model, and year
Where you live – state and zip code
How much coverage you want

How do I switch my car insurance?

Switching your car insurance is easy, even if you are in the middle of your current policy.

Here are some helpful tips to consider to switch your car insurance:

Decide what coverage you want with your next policy
Check if your current provider charges cancellation penalties or fees
Compare prices from at least 3-5 insurance companies (Rate Retriever makes this easy, giving you personalized rates from the top companies near you)
Get a final quote from at least one of your choices
Cancel your current policy once your new one begins

How much car insurance do I need?

The answer to this question depends on where you live and what you would like to cover.

Find out what’s required in your state

Learn about the different types of car insurance

How is Rate Retriever different than other insurance websites?

Unlike other insurance comparison sites, we:

Use third-party data to give you more accurate rate estimates instead of inaccurate, suspiciously low quotes to get you in the door
Do not limit your list of results to paid advertisers
Do not collect your email or phone number before we let you see your results
Give you results after just five questions (however, your results will be more accurate if you complete your profile)

Read more about Rate Retriever

How can I get cheaper car insurance?

There are ways to lower the cost of your insurance such as taking a defensive driving course. Check with your provider to see if there are any discounts you qualify for or can reasonably earn.

How does Rate Retriever make money?

Read our full earnings disclosure

Married couples can save up to 53% on their car insurance premiums

Katie Dee on 2023-11-10

Married couples can save up to 53% on their car insurance premiums

Written by Katie Dee

Edited by Alyssa DiCrasto

Published on 2023-11-10

New research conducted by Rate Retriever shows that couples who combine car insurance policies after marriage can save up to $1,939 – or 53% – on average on their annual premium vs the cost of two separate policies.

This number will vary significantly depending on several factors, including the state you live in, the number of vehicles you are insuring, and the insurance company you and your partner choose.

Sharing a car with your teenager can save you up to 54% on your car insurance

Is your state expensive for car insurance?

Top 5 ways to save on your car insurance

Why do married couples pay less for car insurance?

Whether you are married or not, the amount you will pay for your car insurance premium is based on multiple different factors. These include your location, age, credit score, and more. Car insurance companies will always consider the amount of risk associated with covering a certain driver or car before determining insurance rates.

One of the main reasons why combining car insurance after marriage can save you money is because insurance companies tend to view married couples as being more financially stable, therefore they are seen as a safer choice for insurers. Because of this, some insurance companies even offer discounts for married drivers. Be sure to check with your car insurance company to be sure you are not missing out on these savings.

Furthermore, married couples have been shown to be more averse to risk, meaning that there is a smaller chance of them being involved in an accident compared to their unmarried counterparts.

Differences in car insurance prices for married couples

According to Rate Retriever’s Auto Insurance Rates Quarterly Update, married couples with a joint policy and two vehicles pay an average of $2,797 per year for their car insurance. This is 23% less than married couples with two separate policies who pay an average of $3,645 per year.

Married couples who have a combined policy and just one vehicle pay even less. On average, they save 53% on their car insurance premiums when compared to married drivers who have their own policies.

Remember, these numbers represent the average for these situations, but your exact rates will vary depending on the insurance company you choose, the amount of coverage you are looking for, and your personal details.

Take our quick quiz to compare personalized rates from car insurance providers in your area so you can find the cheapest option for you.

When not to combine car insurance after marriage

While it is generally a smart financial decision to combine car insurance after marriage, there are some instances where this might not be the best option.

Since car insurances rates are heavily based on the amount of risk associated with the policy owner, if one partner has a poor driving record while the other does not, keeping policies separate might be a smarter choice.

Car insurance companies may assign higher rates to married couples if one of the drivers is riskier to cover, resulting in higher rates for both the high and low-risk partner.

Additionally, both partners’ credit score will play a part in determining rates in most states. California, Hawaii, and Massachusetts are currently the only states in the U.S. where credit scores are not considered in car insurance pricing.

If you or your partner has a poor credit score and you combine your policy, it can negatively impact your car insurance rates, resulting in higher premiums for both of you.

Car insurance rates will look different for everybody, so be sure to consider these factors before deciding to combine car insurance after marriage.

States with the best car insurance deals for married couples

Because car insurance companies submit different rating plans to each state’s department of insurance, the amount of savings available to married drivers will vary from state-to-state.

Based on Rate Retriever’s report, the state that currently has the highest percentage of savings for married couples is Nevada, where couples who share a car and have a combined policy pay 57% less on average than married drivers with separate policies. This represents a savings of $2,455 on car insurance premiums.

Married drivers in Tennessee and Missouri also experience above average savings for combining their car insurance policies. Couples with a combined policy and a shared vehicle in these states are saving an average of 56% on their annual car insurance premiums.

Lastly, Kentucky, Mississippi, Pennsylvania, Virginia, and Washington offer savings of up to 55% for married drivers who combine their car insurance policies.

Visit the website to read the full report and see what kind of savings are available for you.

Frequently asked

How does the insurance company determine my rate?

Car insurance companies determine how much they charge you based on your driver profile. Factors that can impact your rates include:

Demographics – your age, home ownership, credit score, and more
Your driving history – how long you’ve been driving, traffic violations, and more
Your car – make, model, and year
Where you live – state and zip code
How much coverage you want

How do I switch my car insurance?

Switching your car insurance is easy, even if you are in the middle of your current policy.

Here are some helpful tips to consider to switch your car insurance:

Decide what coverage you want with your next policy
Check if your current provider charges cancellation penalties or fees
Compare prices from at least 3-5 insurance companies (Rate Retriever makes this easy, giving you personalized rates from the top companies near you)
Get a final quote from at least one of your choices
Cancel your current policy once your new one begins

How much car insurance do I need?

The answer to this question depends on where you live and what you would like to cover.

Find out what’s required in your state

Learn about the different types of car insurance

How is Rate Retriever different than other insurance websites?

Unlike other insurance comparison sites, we:

Use third-party data to give you more accurate rate estimates instead of inaccurate, suspiciously low quotes to get you in the door
Do not limit your list of results to paid advertisers
Do not collect your email or phone number before we let you see your results
Give you results after just five questions (however, your results will be more accurate if you complete your profile)

Read more about Rate Retriever

How can I get cheaper car insurance?

There are ways to lower the cost of your insurance such as taking a defensive driving course. Check with your provider to see if there are any discounts you qualify for or can reasonably earn.

How does Rate Retriever make money?

Read our full earnings disclosure

Understanding the impact of zip code on car insurance rates

Written by Katie Dee

Related Articles

Related Articles

Why zip code factors into car insurance rates

How to control your car insurance rates in an expensive zip code

Frequently asked

How does the insurance company determine my rate?

How do I switch my car insurance?

How much car insurance do I need?

How is Rate Retriever different than other insurance websites?

How can I get cheaper car insurance?

How does Rate Retriever make money?

Sharing a car with your teenager can save you up to 54% on your car insurance

Written by Katie Dee

Related Articles

Related Articles

Should I get my teenager their own car insurance policy?

Adding a teen driver to your policy

The pros and cons of sharing a car with your teenager

Frequently asked

How does the insurance company determine my rate?

How do I switch my car insurance?

How much car insurance do I need?

How is Rate Retriever different than other insurance websites?

How can I get cheaper car insurance?

How does Rate Retriever make money?

New data reveals that drivers with poor credit pay almost 85% more for car insurance nationwide

Written by Katie Dee

Related Articles

Related Articles

Why is credit score considered in car insurance?

States where credit score has the largest impact on rates

States where credit score has the smallest impact on rates

Frequently asked

How does the insurance company determine my rate?

How do I switch my car insurance?

How much car insurance do I need?

How is Rate Retriever different than other insurance websites?

How can I get cheaper car insurance?

How does Rate Retriever make money?

Married couples can save up to 53% on their car insurance premiums

Written by Katie Dee

Related Articles

Why do married couples pay less for car insurance?

Differences in car insurance prices for married couples

When not to combine car insurance after marriage

States with the best car insurance deals for married couples

Frequently asked

How does the insurance company determine my rate?

How do I switch my car insurance?

How much car insurance do I need?

How is Rate Retriever different than other insurance websites?

How can I get cheaper car insurance?

How does Rate Retriever make money?