March 23, 2010

How A Driver Zip Codes Affect Auto Insurance Quotes

There are many factors that can affect your auto insurance quote. From your age and gender, to the car that you drive, everything is weighed by insurance companies. Your zip code is even a factor–a pretty major factor, actually, as you might have noticed if you have ever moved to a new area and seen your auto insurance premium change. Understanding the ways that your zip code affects your insurance can be very important, as it offers drivers new ways to limit their monthly costs and negotiate with insurance companies when renewing.

Zip codes are especially important because insurance companies find statistics based entirely around zip codes. The more insurance claims made in your area, the higher the risk of the area at large. An area with a high population of safe drivers will therefore generally see low auto insurance quotes. Insurance companies look at the number of accidents, but also at the severity of each accident and the average cost of a claim in a certain zip code. They will also look at auto theft, as for insurance companies, this is one of the largest potential claims out there–they have to reimburse a fully covered driver for the entire cost of a vehicle. As a result, areas with high crime will see sometimes drastically increased auto insurance premiums.

To keep car insurance quotes down when driving in an at-risk zip code, drivers should look into various discounts offered by their insurance providers. Installing a car alarm, for example, will usually decrease the cost of comprehensive coverage quite significantly. Choosing a safe vehicle (rather than a flashy sports car) will greatly limit your risks, and this is generally reflected in your auto insurance premium. You should look at quotes from several areas in your city before moving to be prepared for any changes in your rate that will occur. This will help you plan out your budget after a move, and in extreme cases, it might even help you make a decision about where to live.

Collecting various auto insurance quotes will also let you see how different insurance companies set their rates in relation to the risks of certain zip codes. Drivers in your area might be able to save quite a bit of money by choosing a different insurance company. There is no real way to tell unless you check around different places, and fortunately, cost comparison websites make it easy to get several quotes at the same time. Regularly checking rates in your area and adapting your driving habits to your zip code’s risks, will lower the possibility of a claim and allow you to find a reasonably priced policy.