Auto Insurance Rates by ZIP Code (2024)

The District of Columbia, Rhode Island, and Vermont have the lowest number of fatal accidents in the country. Oppositely, Texas, California, and Florida have the highest crash rates.

If you live in a state with high crash rates, especially if you’re in a city, expect your auto insurance rates to be higher than other ZIP codes in rural areas. This is because your odds of getting into an accident are increased.

Not only are your odds higher, but everyone else who lives near you also has the same chance of getting into an accident. Therefore, the rates all around have to be set higher for insurance providers to be able to properly function.

For example, after an accident, your insurance company may need to pay out a liability claim and possibly a collision claim as well, depending on the circumstances. That’s twice the cost.

Anything that could possibly impact whether or not a claim will be filed will almost always impact your insurance rates. A high number of accidents in your ZIP code is no exception.

While the number of crashes in a ZIP code doesn’t say anything about your driving skills, it does say something about the safety of driving in your ZIP code.

Maybe the streets are laid out in such a way that it is hard to see traffic coming as you approach an intersection. Maybe you have a stop sign or two that should really be a traffic light instead. Maybe you have a very young population that likes to drive fast and ignore traffic laws.

Whatever the reason, if driving in your ZIP code is more likely to result in an accident compared to other places, you will see an increase in your rate.

If you know of a particular intersection or stretch of road in your town that is prone to accidents, it may be worth sending a letter to your mayor or city council and asking them to address the issue.

Not only will you be safer, but you might also end up with lower insurance rates as a result.

How Road Conditions Affect Average Car Insurance Cost by ZIP Code

Road conditions in your ZIP code can cause your rates for auto insurance to increase or decrease. This is because potholes and bad roads correlate to more accidents. More accidents lead to more claims being filed.

As you’ve already learned, the more likely folks are in your area to file claims, the higher you should expect your base rates to be. However, road conditions are not the largest factor when determining rates by ZIP code.

Road conditions also contribute to wear and tear on your vehicle, making you more likely to be in need of repairs.

The table below shows some of the major urban areas of the country and the quality of their roads by percentages. Check it out.

Beyond a certain point, road damage can also contribute to accidents as well. If a driver loses control of their car because of a poor-quality road, or if they are weaving on the road to dodge potholes, this can make them more likely to be involved in an accident.

Even though road conditions are not the biggest factor in how your ZIP code is rated, it is not something you can ignore either. Convincing your town to fix any road hazards can prevent damage to your car, as well as potentially lower your insurance rates.

The Legality of Basing Car Insurance Rates on ZIP Code

In most states, it is absolutely legal for insurance providers to rate a driver based on their ZIP code. However, states like California and Michigan have banned insurance underwriters from taking ZIP codes into consideration when calculating rates.

The long answer to this question is that it’s a complicated situation. Many people feel that rating a driver based on their ZIP code can have racist or classist undertones.

Some studies have shown that auto insurance rates for ZIP codes with majority white populations receive lower average rates than ZIP codes with people of color as the majority, despite having similar crime rates and population densities.

Many groups consider this a form of redlining and are actively fighting against the process of rating by ZIP code.

However, insurance companies are adamant that the ratings are solely based on the factors that impact their bottom line, including crime levels and the number of accidents in a ZIP code.

Some states, like California, have put laws in place requiring insurance companies to ask permission before setting rates so that they can be reviewed for issues and biases before impacting the customer base.

If you are concerned about whether or not your state requires approval for rate changes, check with your state’s DMV website for more information.

Though the situation is complex, as of now it is legal at the federal level to rate by ZIP code. While it looks like this will continue for the foreseeable future, more and more states are making changes to auto insurance underwriting practices.

Other Factors That Affect Rates Besides Garaging ZIP Code

Your location is also not the only factor that can change your rates, and you should understand that it is unlikely your rates will be perfectly aligned with the average rates.

Your rate may be higher or lower than your neighbor’s rate based on your driving record, what kind of car you drive, your current age, coverage level, and other factors.

For example, if you finance your vehicle, you might be required to purchase full coverage auto insurance. However, if you also have two accidents on your record and a low credit score, you should expect to pay a much higher rate than the average driver.

From your driving record to your age to the type of vehicle you drive, there are many different variables involved when determining your individual rates. Even something as small as a single speeding ticket can drastically cause your premiums to increase.

To remain a low-risk driver and have the best chance of getting the lowest rates, follow these simple steps.

First, keep your driving record clean. Not only do safe drivers receive better rates, but you can also earn safe driving discounts or price reductions for remaining claim-free.

Next, drive a vehicle that has great safety ratings and crash test results. Double-check the insurance loss ratios for any vehicle you’re interested in purchasing to see the chances of it causing your premiums to go up or down.

Finally, ask about auto insurance discounts. Every company offers different savings opportunities to benefit consumers. Some companies even prefer to insure certain types of people. For example, Geico offers a young driver discount and is known for being more affordable for teenage drivers.

Read More: Geico Auto Insurance Discounts

How Coverage Levels Affect Car Insurance Premiums

There are a lot of different coverage options. Your ZIP code will impact most of these auto insurance policies. Generally, if your liability rates are high, other standard coverages will also be high.

The four most common types of auto insurance are as follows:

• Liability insurance: Liability auto insurance protects you financially by paying for damages to another person’s vehicle if you’re at fault in an accident. It also covers medical bills in the event that someone else sustains any bodily injuries in an accident where you’re at fault. This is mandatory in almost every state, and if you live in an area with a lot of reported accidents, your liability costs may be higher than they would be elsewhere.
• Uninsured motorist coverage: Uninsured motorist coverage, often referred to as UM, is sometimes mandatory and sometimes optional, depending on the state. It covers you at the same levels as your liability coverage if you’re in an accident where an uninsured driver is at fault. If you live in a ZIP code with a lot of uninsured motorists, that can increase the cost of your UM coverage.
• Collision coverage: Collision insurance protects you by paying for damages to your vehicle regardless of who is at fault in an accident. It will protect you whether you hit another vehicle or a stationary object. If you’re responsible for a loan on your car, you may be required by the lender to have active collision insurance on your policy. If you live in an area with lots of accidents, this can increase the cost of your collision coverage.
• Comprehensive coverage: Comprehensive auto insurance covers damage to your car that isn’t caused by an accident. Some examples of what might be covered under a comprehensive policy are hail damage, theft, and vandalism. If you live in a high crime area, the increased risk of theft and vandalism will raise your comprehensive rates.

Almost every state will require you to carry a minimum legal level of auto insurance. To learn what the requirements are in your state, take a look at the table below.

If your ZIP code is exceptionally high-cost for auto insurance, it might be easier for you to simply carry your state’s minimum level of insurance. This is also known as a basic policy.

But remember, when it comes to lowering your insurance costs, you can’t control things like your age, but it is possible to lower your auto insurance rates if you:

• Concentrate on avoiding accidents and traffic tickets.
• Select a vehicle that insurers consider safe.
• Work to improve your credit score.
• Ask about specific discounts that may apply to you.
• Get a quote from several companies to compare auto insurance rates.

You now know the truth about auto insurance rates by ZIP code. Your individual rates will vary from the data we’ve gathered.

However, your ZIP code obviously plays a pretty significant part in your overall insurance rate. Keep that in mind while you comparison shop for the best auto insurance policy.

Other Ways to Lower Your Car Insurance Rate by ZIP Code

As an individual resident, there’s very little you can do to change the rate for your ZIP code. However, you can always petition the city to fix any potholes or start a neighborhood watch group to lower crime rates. Just be aware that those things take a large investment of time and are generally not fully within your control.

Another thing you can do is check with your insurance company to see if they offer a discount for parking in a secure garage. If you live somewhere that you have to pay for parking anyway, it might be worth it for you to park in a secure facility for a lower rate.

It’s also possible that your insurance company may consider parking in your own locked garage a secure facility, so make sure to ask your insurance company if they offer a discount for that.

Compare Auto Insurance by ZIP Code to Save Money

So, does your ZIP code affect your car insurance rates? Yes, the garaging location for your car can impact your auto insurance rates.  However, you’re probably unlikely to move out of your house just to get a lower rate on your insurance.

Compare average car insurance rates by ZIP code to find the best coverage for your location. Remember to also ask about auto insurance discounts you believe you can qualify for. This will help you minimize any negatives associated with your current ZIP code.

It is also interesting to note that some people who live in a recreational vehicle will choose their home state based on the cost of insuring vehicles.

While RV dwellers choose lots of different states to reside in, South Dakota is a particularly popular location because it has both low taxes and low insurance rates.

Of course, if you are moving or plan to move soon, it’s not a bad idea to know which areas have the highest and lowest rates by doing an auto insurance rates by ZIP code comparison.

This is especially helpful if you’re moving to a state that has a lot of variation. For example, rates from Los Angeles are much higher than parts of rural northern California.

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— AutoInsurance.org (@AutoInsurance) February 20, 2024

Even if you’ve had the same auto insurance provider for a long time, it’s worth doing a car insurance ZIP code comparison to find lower rates. This way, you’ll know with confidence that you’re paying for the sufficient coverage you need at the best possible rate.

When looking for average car insurance by ZIP code, use our free tool below — it’s a fast, easy way to find the cheapest insurance rates based on ZIP code.