Car insurance rates are heavily dependent upon the location where a driver and his or her vehicle will be insured. If you want to get cheap car insurance, be sure to pay attention to the following key items:
• Population: Let’s face it, the more people, the more likely there will be more traffic, and the more traffic, the greater chances of getting into an accident. By far one of the greatest factors in determining the risk of accident claims is the density of a specific location. Acquiring car insurance in urban places usually ends up costing more than in rural locations. So if you’re dead set on getting cheap car insurance, forget moving to Los Angeles and start thinking about Boise, Idaho. The chance of you smashing into an impatient inner-city commuter are much greater than hitting a deer in the mountains.
• Natural Disasters: Acts of God, like tornadoes, earthquakes, floods and hurricanes, are not very vehicle friendly. Naturally, places susceptible to these kinds of tragic events increase risk and thus increase your car insurance premiums.
• Crime: The more crime occurring in your area, the more potential your car has for getting vandalized, broken in to, or stolen. Insurance companies check crime statistics by ZIP code to help determine your car policy premiums, just like realtors do when comparing properties. So do your homework before moving into a neighborhood, as the additional costs involved in living in a nicer area could easily be made up in auto insurance savings (plus you get to live in a nice, safer place).
• Risky behavior areas: Places that encourage 24/7 lifestyles, all-night partying, drinking, etc. are definite red flags, as these are indicators of regions with riskier drivers (excessive alcohol/drug abuse, sleep deprivation, etc.). So don’t expect to get cheap car insurance living in Las Vegas any time soon.
• Mileage covered: Where do you travel? How far is your work from your home? Obviously, the more you drive the more at risk you are for getting involved in an accident. Insurance companies often take into account your total commute and total amount of recreational driving when assessing your risk.
All of these factors boil down to one common concept: risk. The riskier a policyholder is to insure, the more expensive insurance will be. Add up all the risks, and that is the total risk contribution a location will have on your car insurance policy’s price tag. The National Association of Insurance Commissioners publishes a yearly chart ranking every state by their average costs for liability and collision car insurance premiums. In case you were curious, in 2007 Washington, D.C., was the most expensive place to have car insurance, while Iowa was the cheapest.
