The rate of your auto insurance premium depends on many different factors one of which is the location of your residence. It is true that your location directly impacts your auto insurance rate. In fact, most insurance companies base their calculation of premium where you live when they price their auto insurance policies.
Factors Influencing Auto Insurance Rates
In areas where more people live the risk of human error that can lead to accidents is higher. This is why city dwellers pay more for auto insurance as the claims payout rate is higher in cities. On the contrary, fewer people travel on the country roads, so the accident risk factor is definitely lower in rural areas. So motorists who live in the country will get a lower rate for their auto insurance than the city dwellers.
Frequency of Accidents
If accidents happen more frequently in a certain area, the auto insurance rates will be higher as the chances of claims are higher. Urban areas normally have higher rate of accidents and auto insurance rates will be higher for people living in those areas.
Snowing and Inclement Weather
The road conditions in areas where there are frequent snowing and inclement weather are dangerous and may cause accidents resulting in higher claim rates . This is one of the reasons why auto insurance companies classify them as high risk areas and those who live in these areas will be charged more for their auto insurance.
High Rates of Crime
Areas where theft and vandalism rates are high are known for higher rates of claims. Insurance companies therefore categorize these areas as high risk and the charge higher premium rates for the residents of these areas.
Probability of Litigation
Insurance companies keep an eye on the litigation risk in an area to determine the premium rate for auto insurance. They check the number of lawyers in a particular area and find out the litigation risk in an area. This may impact the premium rates of auto insurance to those living in these areas.
Availability of Safety Services
Some areas are well protected with safety services in place. The availability of such safety services makes it a safe place and insurance companies include this factor for their location considerations. These are places where there are safety services ensure the safety of road users.
Roads are maintained well in bad weather conditions
Law enforcement is good
Designing of roads that make them safe
Ambulance, police or fire services have minimal response time – this means minimal losses in accidents
Intersections within an area are well planned making them safer.
In essence the auto insurance premium rates vary from place to place according to the weather condition, population, crime rate, litigation rate, frequency of accidents and the availability of safety services in a given area.