Does my ZIP code affect my car insurance cost?


When people shop for car insurance, they typically understand what insurance companies view as risky behavior. Having a bad driving record that lists DUIs, speeding tickets, and accidents is going to make it hard to get a decent policy. Driving certain types of vehicles, like a rare sports car, is also going to make it expensive to get insurance. 

But what about other factors that you may not have thought about before? Let’s specifically focus on the ZIP code that you live in. The city or area of residence has a huge effect on your car insurance rates for a variety of reasons. 

Why is car insurance so expensive in Las Vegas? Because there are a lot of tourists on the road at all times. What about why rates are so high in high-crime areas? Insurance companies are worried about vandalism and car break-ins in these areas, and therefore the premiums are going to be much higher. 

We’ll talk about all the ways that your ZIP code affects your insurance. We’ll also talk about how you can overcome some of these issues. 

The Size of a City Matters

One of the big risks of driving in a big city is that there are more cars on the road than in a suburb. The congestion on the road in places like downtown San Francisco and New York City is going to make it much harder to navigate rush hour than in a little town in New Hampshire. 

This means insurance companies automatically take your big-city driving into account when giving you a policy rate. Even if your driving record is great, you are more likely to get into an accident in big cities. 

If you live in a state with low-mileage discounts, try to limit your driving in large areas to a minimum if you want lower insurance rates. Take a bus or ride your bike so that you put fewer miles on your car. 

One way of proving that you don’t drive in the city very much is to get one of the smart driving devices for your phone that is sponsored by an insurance company. They will be able to see how frequently you are driving in the city. They will also see what your driving habits are when you visit large areas like Las Vegas or Dallas. 

The number of DUI arrests in big cities is also a huge factor in insurance rates. Las Vegas is known for being one of the entertainment capitals of the world. People go there specifically to party and have fun. This means the people who live there are just going to have to accept that it is a risky place to drive, and their insurance is going to be expensive due to it. 

Crime Rate Is Important

We’ve mentioned DUI, but another crime is just as important to insurance rates. If a particular area has a large number of break-ins and acts of vandalism, then the insurance companies are going to prepare for that risk. 

You need to make sure you have comprehensive coverage from your insurance company to recover stolen items from your car. If your insurer pays for theft, then the rates are going to go up every time your car gets broken into. You will also need to do your part to avoid criminal activity affecting your car. 

Parking Your Car

Parking inside rather than outside and buying vehicles that aren’t broken into as often are all great ways to get better insurance rates. For example, the Honda Civic is one of the most vandalized cars in the world. If you buy a Civic, try finding an alternative way to park it and store it while living in a big city. 

Buying a car that doesn’t attract attention could also help when living in big metropolitan areas. Fast sports cars not only attract the police, but they also attract criminals. Standing out is fun until you find yourself on the wrong end of vandalism. 

You can try to place your vehicle in a separate garage or a storage unit outside of the city. This will prove that you are trying to protect your vehicle from criminals. You could potentially get better insurance rates if you take safety precautions for your car like this. 

You’ll need to list your storage garage or alternative storage space for your vehicle in the insurance application to get the reduced rates. 

Don’t Give Your Insurer Misinformation

One way that people try to get better insurance rates is by lying about the address where they are going to store their vehicle. They may also lie about moving to a different city if they see that it presents more risks to an insurance company. You should never be dishonest with your insurer because this can be considered fraud.

Insurance fraud will get you hit with major fines and a loss of insurance. You will have a hard time ever getting good insurance rates ever again if companies see fraud on your record. There are plenty of other ways to get better rates than lying. 

You need to find an insurance company that views you as a person and not just a number. See if there are any smaller, more personal insurance companies in the area that you live in. They may be more willing to hear out your concerns and present unique discounts that the big companies don’t put in the effort to find. 

Unavoidable Insurance Costs

Some things just can’t be avoided when it comes to insurance. You can’t base your place of residence on whether insurance rates are high. Often the other benefits of moving to a big city will help reduce the higher insurance prices. Job opportunities, more car dealerships, and alternate transportation like buses and Ubers will offset the struggles you are experiencing. 

Side hustles and savings accounts are a great way to pay for insurance prices in big cities. See if you can put aside the spare change from your coffee shop visit or the money made selling your old stuff on eBay.  

Put it in an account that is specifically for necessities, like food, water bills, and insurance. There are always ways to get better rates. You just need to get creative and talk to your agent. 

Shawn Laib writes and researches for the auto insurance comparison site, He wants to help people understand how they can overcome difficulties in finding affordable insurance.