A lot of people wonder what factors are used to determine their auto insurance rates. It’s taken for granted that auto insurance companies will likely give you higher rates if your driving record is pockmarked with accidents, infractions and other black marks. Additionally, matters such as age, criminal history and the type of car you own are also taken into account. However, for one reason or another, consumers don’t always understand the affect moving away can have on their auto insurance.
They say location is important in real estate, but it can be just as vital in auto insurance. Even moving across town can change your rate, according to CBS MoneyWatch. The differences vary more on the state level, as different laws and judicial systems can impact how much you pay on your auto insurance.
Companies also take into account the proportion of uninsured drivers in the state where you live. When uninsured drivers have accidents, their cost is often passed on to other drivers at the state level.
Oklahoma has been notorious for having a high percentage of uninsured drivers, helping to drive the high rates of auto insurance in that state. The same held true for Michigan, a state afflicted by economic troubles. With many Michigan motorists unable to afford auto insurance, the drivers who could buy it ended up seeing higher rates. Meanwhile, other states like Vermont – where traffic levels are low and rural driving calm – see lower premiums. Of course, you can earn your way to lower auto insurance rates just by driving safe and keeping a clean record!
Location can also make a different on a smaller scale. For instance, if you’re living in a quiet and secure suburb, that could help drop your rates. But if you’re in a neighborhood with a high crime rating – and therefore a higher risk for car theft or vandalism – you may see your auto insurance climb as a result. And again, traffic levels also have an effect on a local level.
Auto insurance companies also look at weather conditions where you live, safety services in your area – including road design, the prevalence of fire and police departments, and the number of intersections around town – and even how many auto insurance-related lawsuits have been submitted near your home.
So take these matters into consideration when deciding where to move next. The one place you could be exempt from these rules is California, which passed a law forbidding auto insurance companies from taking your zip code into account when deciding your rates. You’d be wise to pick your next moving destination carefully anywhere else, and consider comparing auto insurance quotes diligently to help counteract the impact your new location will have on your premium.
This is a guest post from the folks at 21st Century…
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