August 3, 2010

Why Where You Live Affects Your Quote

People may not realize that where they live affects their auto insurance quote. In fact, part of determining a quote has to do with the area in which you drive. Places people live have definite affects on auto insurance quotes. The difference can be small or huge depending on what plan you use and where you live. This is why research for auto insurance quotes is so important.

Insurance companies build their quotes upon statistics. Accident, weather, and theft statistics in your area are a part of what determines your auto insurance quote. Prices are determined from the way insurance companies use this information. That is the reason why some things matter that you may not think would matter. This is the way insurance companies work and the way they are able to calculate your auto insurance quote. The companies work by the law of averages. They take statistics from all available sources. They find out statistically whether people are more or less likely to have accidents and commit vandalism. Because of these statistics they are able to proscribe probabilities to everything from age to sex to type of car, and yes even to geographical location.

This is why rates may be higher for a person who lives in the city than for one who lives in the country. Even if every other variable about a city or country person may be the same, aside from their location the person living in the city will always pay a higher auto insurance quote. This has to do with statistics. There is more traffic in the city, there for more chances to get in an accident. There is a higher chance of vandalism and stolen vehicles. There is even an increased chance of just random accidents that happen while the car is parked. All of this is due to the increased population surrounding the person in the city. It is not based on opinion or personality, rates are determined from the facts gathered from accident reports, previous claims, and police reports. It is all statistics for a particular region.

Even within a city there will be differences. Some parts of town are simply safer than others. One part may have higher crime. Another part may have lights that are simply unsafe and generate a spike in accidents. Whatever the reason, certain parts of a city may spike high on an insurance companies data collection process. Crime statistics and accident statistics within a particular city may result in higher rates for a person living in one zip code versus another.