How location affects car insurance premiums

Your city, address and ZIP code have a big impact on car insurance.

Last updated:

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

Your car insurance premiums are a combination of many different factors. Location is one of the most significant factors. The state you live in, whether you’re in a rural or an urban area, what your house is like and even your specific address can all raise or lower your car insurance premiums.

How your city and state impact the cost of car insurance

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

It’s probably not worth moving to another state for lower car insurance premiums, but it is worth being aware of these factors as they are also applied on a regional and local level.

  • State legislation. Liability insurance and minimum requirements are managed on the state level, which means costs can vary widely.
  • 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 therefore may have higher premiums. And rural areas may have higher risks of animal collisions.
  • Competition. Areas with more competing insurance companies might have lower prices.

Why car insurance varies by state

There ae a few main factors that affect how your car insurance varies by state, a few of those are:

  • States’s minimum requirement. They are the biggest factor in car insurance rates.
  • Liability. only is the cheapest form of insurance, and all states set certain minimum levels of insurance.
  • Underinsured motorist coverage. some states also require you to add it, which adds to your premiums. And still others require PIP insurance, or personal injury protection insurance.

Take Michigan as an example. Michigan has some of the highest car insurance rates. Michigan drivers are required to get no fault car insurance that covers all injuries and damages in an accident. Michigan residents receive unlimited protection for personal injuries and up to three years of income loss after an accident. So while drivers and passengers receive extra benefits after an accident, drivers have to pay extra for that privilege.

Car insurance rates by state

Compare car insurance by state

Get car insurance quotes in your area

Name Product Roadside assistance New car protection Accident forgiveness Safe driver discount Available states
All 50 states
Save up to 31% with safe driver discounts and bundling all your rides in one convenient policy.
Only pay for how much you drive with the Metromile app. Get rates from $29/month plus pennies per mile.
All 50 states
Get free quotes from top insurers for the exact coverage you need in minutes.
All 50 states
It's quick and easy to get an online quote with Geico, and you might be surprised at how much you could save.
All states except AK, HI, LA, MI, RI
Drivers over 50 and AARP members enjoy special car insurance pricing and benefits.
All 50 states
Enjoy premium perks like better car replacement and accident forgiveness plus local agent support.
All 50 states
Enjoy having your own dedicated agent to help you get the best discounts and coverage.
All states except AK, DE, HI, MT, NH, VT, WY
Esurance offers a modern online and mobile experience that helps you take your insurance on the go. Available in 42 states.

Compare up to 4 providers

How your neighborhood affects car insurance prices

Urban areas are more densely populated than rural ones, with busier roads, more car accidents overall and a generally higher likelihood of making claims of any kind. This increases premiums in cities.

However, living in rural areas means you typically need to drive longer distances on every commute, the roads can be in worse condition and you may be more likely to lose a car to bushfires or other hazards than someone living in the city.

Overall, you’re more likely to get lower premiums in rural areas. However, it all depends on where exactly you live.

Premium differences based on your address and home

Your address is used to apply very specific risk data based on location, and risk factors vary between neighborhoods the same way they can vary between states. This is based on the odds of making a claim and might be affected by countless factors such as how narrow or wide your road is, whether it turns on to an unusually dangerous intersection and many others.

  • 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. Therefore, addresses without a garage have higher car insurance prices.
  • Weather. Rain, snow, hail, flooding and other bad weather can cause car accidents, so areas with frequent or extreme weather conditions can have higher insurance rates.
  • Crime. If your comprehensive car insurance policy includes coverage for theft, the crime rate in your neighborhood will likely 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 in your area can lower premiums.

How to get cheap insurance no matter where you live

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 at low risk for accidents or claims with an app that measures how you drive. This lets you take perceived risk out of the equation and get a rate based on your actual driving habits.

Safe, low-mileage drivers could save 50% or more with usage-based insurance.

Bottom line

There are many other factors which 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.

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site