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Does where I live affect my car insurance rates?

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Things to know...
  • Your zip code matters when it comes to calculating your car insurance premiums
  • If you live in a high-crime area, your rates may be higher
  • Car Insurance companies use many factors to determine how much you will pay
  • If you need lower insurance premiums, you can use a comparison tool to shop the rates of other carriers

Many factors can influence your car insurance rates, and your zip code is just one of them. When you give your insurance company your address, you are telling them critical information about your location that can either work in your favor or against you.

Fortunately, your zip code is only one factor, and if you don’t like the rates of your current insurance carrier, you can easily look for lower rates with another company by using a car insurance comparison tool.

Information that Can Be Gleaned From Your Zip Code

AdobeStock_79347833-1600x1600Your address, including your zip code, can provide insurance carriers with a plethora of information. By performing a quick online or database search, your insurance carrier can locate the crime rate in your neighborhood.

They can determine if your area is affluent or struggling, and they can see how many cars have been stolen or vandalized in your area.

Checking Rates by Zip Code

If you want to check the car insurance rates across the city where you live, you can use a comparison tool to get quotes for multiple areas. When you input your information, leave everything the same except your address.

While you won’t be able to use the addresses that are not your own to get car insurance, you will be able to see the differences in rates across your city or county.

Answering the Move or Don’t Move Question

If your zip code is causing your insurance rates to be higher than normal, you may be wondering if you should move. While you may want to consider moving to a better neighborhood in the future, there’s no reason to pack up your house.

In addition to your zip code, car insurance companies use several other factors to calculate your auto insurance rates.

  • How Many Claims You’ve Had
  • How Much Coverage You Need
  • If You Are Over the Age of 25
  • The Number of Miles Your Drive Per Year
  • Your Credit Score
  • Your Gender
  • Your Marital Status
  • Your Past Driving Record

Lowering Your Car Insurance Rates

AdobeStock_65265779-1600x1600If you have a zip code that is associated with high crime rates and/or poverty, the other factors that are considered when underwriting your auto insurance policy, including your credit score, the type of car you drive and your driving history, may make up for the insurance premium rate hike. If it doesn’t there are several things you can do to ensure you get the best rates on your new car insurance policy.

  • Lower Your Coverage – If you have full coverage, consider lowering it to liability only or reducing your coverage amounts.
  • Raise Your Deductible – If you have full coverage, consider raising the amount of your deductible to lower your monthly premiums.
  • Make Sure You Are Getting Discounts – Car insurance companies offer numerous discounts from multi-line to good student discounts that can help make your car insurance more affordable.
  • Shop Around – Different insurance carriers weigh the factors differently, which could result in lower insurance premiums. To find better rates, just use a car insurance comparison tool to quickly find quotes.

Your zip code can cause your insurance rates to be higher or lower, depending on where you live. If you are planning on moving, you may want to check the zip code with your insurance carrier, but since there are other factors that are taken into consideration, you may be able to negate the cost of your insurance by ensuring other factors, like your credit score, car insurance claims and driving history are good. If all else fails, you can always switch insurance companies by getting quotes from a comparison tool.

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