How Zip Codes Affect Your Car Insurance

Considerations

If you're thinking of relocating to a new city, factor in your change in auto insurance rates as part of your new cost of living calculation. If you're moving from a rural town to a major metropolitan area such as New York City or Boston, your premium could double or even triple. Before you move, you should get a quote from your present insurance company as well as from other companies that issue policies in your new location.

Comprehensive auto insurance covers non-accident-related occurrences such as vandalism, theft and glass breakage. If you live where your insurer experiences a high volume of vehicle theft or vandalism claims, such as an inner-city neighborhood, your comprehensive premium may be higher than for those who live in "safer" areas. You may be able to lower your premium by switching to a company which offers discounts for vehicles equipped with anti-theft devices or systems if your current company does not offer them.

You insurance company may also look at the number of accidents that occur within your zip code on an annual basis, as well as their severity in terms of the dollars paid out in accident-related claims. If you live in a high-traffic area where accidents are a commonplace occurrence, you can expect to pay a higher premium than someone who lives in a more pastoral setting where vehicles and accidents are lower in volume.

The more you're on the road, the greater your risk of being involved in an accident. One question auto insurers ask of applicants is how much of a work commute they have. If you use your vehicle in an occupation such as sales where you're constantly on the road, you're premium may be even higher. The insurer may take your word as to your commuting distance, but if it has any doubts it may use your home and work addresses and zip codes for verification purposes.