Cheaper Auto Insurance Rates — Effects Of Your Zip Code

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The fact that a person’s zip code affects his/her auto insurance rate isn’t as apparent as the effect it has on their home owners’ policy. But it does have a huge effect.

Those who know this and understand how to use it to their advantage pay a lot less. This is because they factor this in when buying a new home. This results in huge savings over a few years. Here’s why…

1. Your place of residence will largely determine your mileage in a number of ways. First, if your home is far from the places you frequent (but must drive to) you will accumulate a higher mileage.

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.

Secondly, the area you live in will determine whether you’ll have access to standard mass transit. Using the mass transit will definitely help you cut down your rate.

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.

This simply means that taking some time to calculate the effect of house A and B on your auto insurance rate is very important if you’re about buying a new home. You might save a few hundred dollars on a house only to pay a lot more in auto insurance premium dollars over 20 or more years.

Even if you’ve already bought a home, you can find a better rate if you get and compare quotes from a wide range of insurers. They all attach difference relevancy scores to the various factors used to calculate your auto insurance rate.

And, if you’re shopping for a home, it will be a smart idea to also compare auto insurance quotes for the different zip codes. Remember, if your zip code adds $250 to your annual auto insurance premium, you’ll pay $5,000 extra over the course of 20 years!