Why Does My Location Affect My Car Insurance Premium?

There are many factors that go into calculating your car insurance premium, but location is one of the big ones. It can also be a frustrating factor, considering that it has little to do with your own driving. It is not something you can simply change, unless you intend to uproot your entire life just to save a few bucks on car insurance.

If you’re wondering what location has to do with your car insurance premium, you’re not alone. Many people are surprised to find out that their premium is high simply because of where they live. But knowing the reasons why can give you pointers as to what you can do to alleviate the cost somewhat.

When calculating car insurance prices according to location, the different types of car insurance are taken into account. As we will see, this is because different locations come with different risks.

These are the main reasons car insurance premiums are affected by location.

Insurance Rates

In most states, third-party liability insurance is required by law. This, however, does not mean that everyone actually gets third-party cover. In some states, it is not required and insurance rates are low. In others, insurance rates are low even though it is required. If you live in a state with low insurance rates, you will likely pay more for third-party and your own collision cover.

This is due to the fact that your insurer is likely going to have to pay out your full claim if the other driver does not have insurance. There is, unfortunately, nothing you can do about this, as insurers will always price you higher according to this risk.

Crime Rates

A comprehensive car insurance premium covers you for theft and vandalism as well as collisions. Since different areas have different crime rates, your risk of theft and vandalism depends on where you live. This is something that can even change from one neighborhood to the next.

In a particularly high-risk area, you will not benefit too much from the fact that you do not drive regularly. This is because your car is most at risk of theft and vandalism when it is parked.

You can get discounts on your car insurance if you live in a high-crime neighborhood by installing safety features in your car. The best car security systems will make it far more difficult for thieves to get away with your car. You can also benefit from discounts if you secure the space in which you keep your car.

Accident Rates

Of course, when it comes to collision coverage, accident rates are particularly relevant. In certain regions, accident rates are much higher than in others. This could be for a number of reasons, including higher traffic levels, the possibility that people need to drive more to get around, and bad roads.

While you cannot change how other people drive in your state, you can get discounts by improving your own driving. Many car insurers now provide discounts by installing a device which tracks your driving and rewards you for driving safely. You can also benefit by taking a defensive driving course, which ensures you are better prepared to minimize damage when it is another party at fault.

In a region where high accident rates lead to high insurance premiums, you should also get discounts if you do not drive your car all that much. In today’s world, with many people working from home, chances are that you drive far less than you used to. Your insurer may even be required by law to lower your premium for this reason.

Weather Conditions

Finally, one further aspect that impacts your car insurance according to your location is adverse weather conditions. If you live in a region where extreme weather puts your car at risk of damage, you will pay higher premiums. For example, if you live in an area where hail regularly dents cars, you will pay more for coverage.

You may be able to reduce your premiums by keeping your car in a garage where it is protected from the elements most of the time.

Your location impacts your car insurance premium, and while this may not seem fair, it is inevitable. You may be able to get discounts if you can find ways to ameliorate the risk.

Back to top button