How your Location can Affect your Car Insurance Rates

Do you think that location does not affect you car insurance rates? If so you need to rethink that, in most certainly does affect the car insurance rates. The difference in car insurance rates can be small or it can be huge depending on what plan you use and where you live. This is the reason why it is important to properly research more than one insurance policy.

♦  How your location can affect your car insurance rates

Why does location have anything to do with car insurance? Why should it have any bearing whatsoever? It all boils down to the way that insurance companies work and how they calculate car insurance quotes.

♦  How do the insurance companies calculate your quote?

Insurance companies use the law of averages. They take statistics of thousands upon thousands of people. They derive statistical analysis of all the variables that affect accidents and vandalism. Because of these statistics they can proscribe probabilities to everything from age, to sex, to type of car and even to location.

♦  An example of the effect of location on car insurance rates

Let us assume that every single other variable is exactly the same. If you have two people, one living in the city and one in the country, the city person will always pay more. Why is this? It is simple if you think about it. There is a lot more traffic in the city, because of this there is a higher chance to get in an accident. Higher population and increased crime means higher chance of vandalism and stolen vehicles. There is even increased chance for random accidents that happen while the car is parked because of increased traffic. All of this is directly due to the fact that there is increased population surrounding in the city. These stats are not based on bean counters, “opinion” they are based solely on facts from police reports, accident reports and claims. It is all simple statistics.

The secret getting quality car insurance is to shop around. Spikes in data for specific areas may be based upon some different statistics. If you shop around it is possible to get slightly lower costs. Location definitely affects car insurance rates based on statistics, but all of the statistics may not be exactly the same.