It is against the law to lie on a car insurance application. Any attempt to get a lower rate based on incorrect information can get you in to real trouble. This is especially true for the location of your vehicle. When you fill out an application, you will be asked for the address where the vehicle is generally housed, or where you park each day or night.
This important piece of information is used in many ways. Let’s find out how where you live affects your car insurance rates.
Why Insurance Carriers Care About Location
There are many reasons why your insurance carrier cares about where your car is kept. From determining how likely you are to get into a car accident to how much it will cost for repairs; your location has a lot to reveal.
While your location may lead to higher rates, it can also lead to lower rates. If you live in a zip code with lower theft, accident or repair rates, you should see lower premiums than if you lived in a higher risk area.
So generally, your location is a big determinant of your rate. And even though it might be tempting to list a cheaper location on your auto insurance policy to save a little money, insurance companies nearly always catch up with this game and you could find yourself in big trouble.
What Factors Do Insurance Carriers Look at By Location?
There are several detailed data points that your car insurance company may look at to assess your location. Here are a few.
Population – Simply put, the higher the population in an area the more cars there are on the road. And more cars on the road always leads to more accidents and an increase in your chances of having one.
Climate – Areas that experience extreme climate and weather conditions, such as harsh winter storms of snow and ice, hurricanes or tornadoes will see higher claims rates, and this translates to higher premiums for you.
Crime – Theft and vandalism rates, if they are higher in your area than others, will automatically put you in a higher risk category, increasing your premiums.
Claims – There is a direct correlation between the number of claims in an area and premium amounts. More claims mean that the insurance company as had to pay out more money and, of course, this expense is passed on to you.
Infrastructure – The conditions of the roads, especially intersections where many accidents happen, can affect premiums. In addition, in places where traffic laws are aggressively enforced, you could see slightly lower premiums.
Every insurance company calculates premiums in their own way, using their own algorithms. The best way to find the best rate is to shop around. InsuranceWins can help. Simply fill out the simple form and compare quotes to find the lowest rates in your area. A little research can save a lot of money.
