How does where you Live Affect your Auto Insurance Rate?

If you’re not so lucky, though, there’s only one sure way to avoid paying the rate for your particular area: Sell your car and put on your walking shoes. The insurance company’s betting I’m not. When I insure my auto, home, health or life, I’m betting I’m going to have a car crash, lose my house to a fire, get sick or be run down by a train. All insurance involves a kind of paradox.

The reason is simple: Your place of residence influences your likelihood of having an accident, as well as how much the mishap might cost. Plenty of empty roads. Oklahoma sometimes has serious hail storms that leave cars pockmarked. But it’s not just rough winters that raise rates. What’s the weather like? Snow and ice translate into skids and crashes. City drivers almost always pay more than their country cousins. Put simply: More cars mean more fender benders. How densely populated is it? Rates in Vermont, for example, are among the lowest in the United States. Higher claims translate into higher premiums.

Some location-related factors that can bump your premiums are quite surprising. For example, Michigan guarantees unlimited personal injury protection and also requires insurers to pay victims up to three years of lost wages. Consequently, the state’s rates are among the highest in the U.S. One consideration, for example, is your state’s policy about medical benefits. Insurance companies look at more than just the local conditions that can cause accidents when they’re determining your insurance rates. Read on to find out what they are.

The legal climate in your state can affect rates, too. More lawyers, more lawsuits. Some insurers even vary rates according to how many lawyers per capita there are in your area. In Louisiana, judges are usually the ones who determine damages for accidents; a jury gets involved only if the amount of the claim is more than $50,000. Some areas, particularly those with high unemployment, have a larger number of uninsured drivers on the road.

Way back in 1891, inventor John William Lambert was trying out his new “horseless carriage” when he crashed into a hitching post. As you probably know, insurance companies base their rates on many factors, including your age, driving record, marital status and the type of car you own. We’ve come a long way since then. What may come as a surprise, though, is that where you live also has a significant effect on your insurance premium. Today, every state requires drivers to carry insurance, and what you pay for insurance over the life of your vehicle can be greater than the cost the car itself. His top speed was only 5 miles per hour (8 kilometers per hour), so injuries were minor.