Insurance companies consider area location in determining auto policy prices. Others factors that come into play are age, sex, type of car, driving record, credit history, claims history, type and amount of car insurance last bought.
People who live in urban areas usually are assessed higher insurance premiums than those who live in rural areas. The reason for this is because in places where more people live together, the probability of accidents, vandalism, and theft rises with the number of residents.
Weather can also impact insurance premium rates. A geographic location where extreme weather is experienced – either intense heat or intense cold – could also raise insurance rates. If an insured person lives in a secluded area where access to doctors and hospitals is difficult, he may find that his insurance premiums to be higher.
Laws in some states may produce higher vehicle insurance. These states could institute laws that call for owners of vehicles to purchase minimum liability insurance on physical injury and damage to property. If auto insurance is not a legal requirement in that state, a car owner is asked to show proof of financial responsibility before he is allowed to drive his car on the road.
Only three states, New Hampshire, Tennessee, and Wisconsin compel drivers and vehicle owners to buy a minimum amount of liability insurance. Statistically, the five states with the highest premiums are New Jersey, Washington, D.C., New York, Rhode Island, and Connecticut – in that order.
If you reside in an area with expensive car insurance premiums, there are ways to pay less unless you plan to move to another state. You could earn discounts on your premiums if you enroll in a defensive-driving course, you use airbags and anti-locking brake systems or other safety devices on your vehicle, or you renew your policy and show a good driving record and proper claims.