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How location affects car insurance premiums

Local accidents, crime rates and state-required coverage play into premiums.

Updated

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Location is one of the most significant factors that determine your car insurance premium. For one, the number of car accidents your insurance company sees around your address could raise or lower your rates. But you’ll find a number of other characteristics that could leave you paying more too.

How does my address affect car insurance premiums?

Urban areas are more densely populated than rural ones with busier roads, more car accidents and a higher likelihood of making claims. These factors increase premiums in major cities and surrounding addresses.

However, living rural could mean you drive longer distances, see less road upkeep and risk losing a car to bushfires or animal collisions.

Overall, you should see lower premiums in rural areas, but it depends on the factors surrounding your specific address.

How does my city or state impact car insurance costs?

The state you live in has a significant impact on the price of your car insurance. For example, car insurance is most expensive in Michigan, while Maine tends to have the lowest prices overall.

It’s probably not worth moving to another state for lower car insurance premiums. But you can know what to expect on a regional and local level.

  • State requirements. Your state manages drivers’ minimum requirements, which means costs can vary widely across the nation.
  • Population. A higher population means more cars on the road, more chance of having an accident and higher premiums.
  • Number of claims. The more claims originating from your state, the higher you can expect your premiums to be.
  • Risk. States with higher occurrences of car theft, vandalism or extreme weather conditions pose a greater threat and may have higher premiums. Rural areas may risk more animal collisions.
  • Competition. Areas with more competing insurance companies might have lower prices.

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How do car insurance companies use my address?

Insurance companies use your address to apply specific risk data based on that exact location and ZIP code. This is based on the odds of making a claim and can be affected by countless factors like narrow roads or dangerous intersections. Some of the local factors used to determine risk:

  • Where you park. You can pay less for car insurance if you park in an enclosed garage or carport overnight, instead of on the street. Addresses without a garage have higher car insurance premiums.
  • Weather. Rain, snow, hail and other bad weather can cause car accidents, so areas with extreme weather can see higher insurance rates.
  • Crime. The optional comprehensive car insurance coverage includes coverage for theft. But the crime rate in your neighborhood will impact your premiums.
  • Population density. The more crowded your area and the more cars on the road, the higher the car insurance.
  • Road maintenance. Poor road conditions are responsible for many accidents, so having better-maintained roads can lower premiums.

How do I get cheap insurance no matter my address?

The golden rule of car insurance prices is that your odds of making a claim determine your premiums. Fortunately, you don’t need to move to save on car insurance.

If you live in a high-risk area, usage-based car insurance is your best bet for cheap rates. You can show your insurer you’re a safe driver with an app that measures how you drive. This lets you take out the perceived risks out and get a rate based on your actual driving habits.

Safe, low-mileage drivers could save up to 50% with usage-based insurance.

Get car insurance quotes from companies near you

Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
Progressive
Optional
30%
All 50 states
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
Clearcover
Optional
Yes
AZ, CA, IL, LA, OH, TX, UT and WI
Get instant online support and score a low rate thanks to online data that sets premiums automatically.
The AARP Auto Insurance Program from The Hartford
Optional
Yes
All 50 states & DC
Drivers over age 50 can enjoy low rates and perks designed for mature drivers, plus freebies and AARP member perks like free replacement cost coverage.
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Bottom line

There are many other factors that affect car insurance prices besides location. It can be worth looking over them for other ways to cut your car insurance premiums. Once you’ve done that, getting low prices is largely about comparing policies side by side.

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