You may be interested to learn that the chances of you getting involved in a vehicle collision may increase or decrease depending on where you live. The cost to provide you with coverage is determined by the likelihood of you being in an accident. Underwriters use statistical information that can determine your odds based on the area in which you reside.
Most accidents occur within ten miles of the driver’s home. By studying the number of collisions that occur in various locations insurers are able to predict the chances of someone living in that neighborhood being involved in a wreck. Once they have predicted the number of accidents they can then divide that number by the number of people living in each zone to determine what rate they need to charge.
Rural areas have far fewer incidents then densely populated areas. The fact that fewer cars are sharing the road has a big impact on how many wrecks will occur. Since there are fewer collisions and smaller populations the cost to insure a vehicle in these areas can be quite a bit less than the denser cities.
Certain zip codes or geographical areas within a city can also increase rates. By studying reports the insurers are able to determine which zones have the most accidents. Life in a big city brings with it many more cars on the road and a higher chance of incidents involving these vehicles. Many times the worst zip codes or intersections are identified and people living close to them may end up paying higher premiums.
Border states often have higher theft rates. Comprehensive coverage provides reimbursement for loss due to vandalism, theft, or other factors other than collisions. Studies have shown that higher crime areas increase the number of claims due to theft or vandalism. States that share a border with Mexico also report higher than average theft claims. People living in these states can expect to pay higher premiums because of this increased risk.
Online car insurance quotes will often allow you to compare rates by different zip codes. Lowering the cost to insure you vehicle may be as easy as choosing the right place to live. Just remember that the chance of hitting or being hit by someone else in a car usually occurs close to home. Understanding how different locations can affect the cost to insure your car may help you see why some premiums are higher than others.