How Your Location Affects Your Auto Insurance Rates

You probably know that your location affects your car insurance premiums, but do you know why auto insurers care so much about location? Your location determines multiple factors that affect how much your insurer spends to do business with you. Here are some of the location-dependent factors that determine auto insurance rates.

Claims History

Some areas experience higher claim rates than others. The more claims an auto insurance carrier settle in a given area, the higher the carrier's cost of doing business in the area. Auto insurance companies have to increase their rates in such areas if the companies are to remain in business.

Insurance Fraud

Auto insurance fraud costs the industry significant amounts of money every year. The fraud comes in various ways, but it always leads to high costs of doing business for insurers. This high cost of business translates to expensive coverage. If your area experiences numerous fraud cases, expect higher rates than neighborhoods with low fraud rates.

Auto Accident Laws

States have different auto insurance laws, and these laws indirectly affect auto insurance rates. For example, some states have caps on auto accident claims while others don't have such limits.

If you live in a state that allows auto accident victims to claim medical benefits for life; the rates in your state are likely higher than states that place limits on such claims. Take a look at your state’s laws to learn more about how this could affect you.

Uninsured Drivers

Uninsured motorists drive auto insurance rates up because the insured drivers have to shoulder the burden for their uninsured counterparts. For example, your auto insurance company has to step in if an uninsured motorist causes you injury. Thus, a high number of uninsured motorists in your area inevitably raise your coverage rates.

Auto Crimes

The crime rates in your area, specifically crimes that target cars like car theft and vandalism, will make your rates rise. Criminals force insurance companies to pay out claims for car damage or loss, which causes the insurance company to raise rates to cover their losses. Conversely, your rates may fall if you move from a high-crime area to a low-crime area.

Parking

The safety of your parking area determines how safe your car is. A safe parking area means you are not likely to need to make a car theft or vandalism claim. Your auto insurance company then rewards you with low rates. Therefore, if you live in a community where people park in the street, your rates won't be friendly as compared to a community with say closed parking areas.

Road Conditions

Road conditions affect the rate of accidents, and more accidents translate to higher auto insurance rates. For example, you may see higher rates if you live near a dangerous highway that experiences lots of accidents every year. However, you may enjoy more reasonable rates if you live in an area with good roads that don't experience many accidents.

Population

In many cases, a high population translates to high auto insurance claims, and a high number of claims translate to high rates. For example, a high population density is likely to experience more accidents because of more people and more cars in the area. A high population may also attract a high rate of car theft and vandalism.

Talk to Coastcomp Insurance Agency if you want to know more about all the factors that affect your auto insurance rates. We will help you asses which of these factors you can control so that you can enjoy better coverage rates. Contact us today as the first step towards high-quality coverage at reasonable rates.