Light Trails of CarsWhere you live can definitely have an impact on your car insurance rates. However, the impact may not be to raise your rates; in some cases, living in certain ZIP codes can actually give you lower insurance costs. Furthermore, no matter where you live, you can control the cost of car insurance by controlling other factors and by shopping for the best auto insurance prices.

How Are My Insurance Rates Determined?
It is important to remember that many factors go into an insurance company’s decision on what to charge you for your car insurance. The most important factor for any driver is driving history. If you have frequent accidents or violations that result in claims against your auto insurance, you will pay higher premiums than a driver with a clean record. Furthermore, some factors, such as age, are things you cannot control but still affect your insurance costs.

Insurance companies ultimately determine how much to charge you for insurance based on your perceived risk. If it appears you may make a claim and are a higher risk to cost the company money, it is a fairly safe bet your insurance rates will go up. This is why insurance companies raise rates when someone has a speeding ticket. The ticket itself does not cost the insurance company any money; however, speeders are more likely to get into an accident than non-speeders.

How Does My Location Affect My Insurance Rates?
Applying this logic to location, insurance companies often raise rates on people who live in areas where there are high rates of claims. Generally, this means more densely populated areas where traffic is thicker. However, some rural areas also have high premiums due to factors such as frequent weather issues or high speeds on rural roads.

When an insurance company calculates projected rates, it takes many factors into account, one of which is location. Location is often determined by ZIP code. ZIP codes are postal service designations that define geographic locations. The insurance company looks at accident rates and other factors for that location and combines this information with personal or individual information. This allows the company to issue a personalized quote for any driver no matter where he or she lives.

Am I Better Off Living In or Out of A City?
It is difficult to make a definitive statement about where insurance rates are the lowest. People who live inside a metropolitan area may experience higher insurance rates than those in rural areas. However, where you live in relation to the metropolis can also have a huge impact on your eventual auto insurance pricing.

This is because those who live downtown may not drive as frequently as those who live in the suburbs. A person living outside the city proper most likely drives in to work every day, fighting traffic and parking, while a person who lives in the city itself may take public transportation to work while using the car only on weekends and traveling out of the city. This may mean that the person living in the city itself has lower insurance rates than the person living outside the city.

Many insurance companies offer lower rates the farther you live from a major metropolitan area. However, some companies will ask how many miles a day you drive and if those miles are traveling into and out of a major city. If so, you may have higher auto insurance rates than someone who lives closer to the city simply because you drive more each day, raising the chances that you will someday have to make a claim on your insurance.

How Can I Lower My Big-City Car Insurance Rates?
For someone who is paying high prices for auto insurance because he or she lives close to a major metropolitan area, there is hope. Most people can lower their auto insurance rates by following a few easy steps, no matter where they live.

First, you must examine your auto insurance carefully to ensure that you are carrying the right type and amount of coverage. Any non-essential coverage can be dropped, immediately lowering your auto insurance costs. For example, carrying collision coverage on an old vehicle may not be the most cost-effective use of your insurance dollar, especially if you are a careful driver and have not made a claim in several years.

Another way to lower your rates is to consult with your insurance agent to be sure you are getting all the discounts to which you are entitled. You may be missing crucial discounts that could give you significant savings on your auto insurance prices.

Finally, you can lower your auto insurance costs by shopping carefully for insurance. Companies compete to give customers the best rates, so staying with your old company may not be the wisest choice. Other companies may be glad to have your business and will price your insurance accordingly, even if you live in or close to a large city.