Does your zip code affect your auto insurance rate? Yes, it does affect it. It’s just that most people don’t know this.
Getting this clear is important especially when you’re about to buy or rent a new home. What you might save in buying a home in a certain location might become totally insignificant when compared with the extra you pay for an auto policy. Let’s see why…
1. We all know that your annual mileage partly determines the risk an insurer carries by insuring you. If you live far from places you drive to daily, your mileage will be a lot higher than if you lived a lot closer.
Take your place of work as an example: If your home is 10 Km from your office and you drive there five days a week, you’ll accumulate twice as much mileage as your neighbor whose office is just 5km away.
Furthermore, living in a city that does NOT have a standard mass transit system will force you to drive more often. Apart from the fact that this will raise your mileage, it will also increase wear and tear which in turn will have an impact on your auto insurance rate (at least in the near future).
2. What do you think an insurer would do if police records show that your area is prone to crimes like car theft and vandalism? They’ll certainly factor this in when calculating your car insurance rate.
So before you get carried away by the few hundreds you may save on one house over another, consider what you might end up paying for auto insurance over the years.
What if you’re NOT about buying a new home? Thorough comparison shopping will show you insurers who factor this less than others when calculating your rate. This will you help you find cheaper rates.
But if you’re still about to buy a home don’t forget that if your zip code makes you pay $150 more annually that means $4,500 more in 30 years. So try getting and comparing quotes for different zip codes to find out an auto insurance-friendly neighborhood.
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