Why did my car insurance go up when I moved?

Moving can affect your car insurance rates. Depending on where you move, they may go up or down. Luckily, there are a few things you can do to lower rates.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance...

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Reviewed byDaniel Walker
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UPDATED: Apr 20, 2020

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Things to remember...
  • Insurance companies look at ZIP codes when setting rates. Where you live is a big component of how much you pay for your car insurance premiums
  • Large cities tend to have higher insurance rates because of the population density and the higher chance of being involved in a car accident
  • You must notify the company of a move. This is mandated by most companies so that they can reassess your rate. Also, some smaller companies may not offer insurance in some states so you want to make sure you have car insurance in your new state

Moving can be exciting and yet stressful. There are countless little expenses you’ll have to contend with, and you may even be faced with changes to your insurance premiums.

In some cases, just moving one town over can result in higher fees, so it’s important to talk with your company ahead of time so that you’ll know what to expect.

Compare rates of top insurers in your new neighborhood. Just enter your ZIP code above.

How Your Address Can Affect Insurance Premiums

There are many factors that go into your individual premiums, but a few of them deserve special attention when making a move including:

  • New ZIP code
  • Proximity to work
  • City or suburb

Insurance companies typically charge lower rates for people living out in the suburbs. This is because cars that are primarily located in cities are more likely to be damaged by accidents or vandals. The risk of theft is also generally higher in urban areas. 

Before deciding on your new housing location, take note of the different ZIP codes. You can call your agent to ask which ZIP codes have the lowest rates.

If you’ve already decided on a certain area, then do some comparison shopping to see if another company will offer lower rates for that particular neighborhood.

When reviewing different ZIP codes, the insurance agents look at the average number of claims, accidents, and thefts. Moving just a few miles in any direction can result in drastic changes in your insurance premium. In some cases, the increase can be hundreds of dollars.

When it comes to fraud and some other claims, you may not even be aware that a certain area faces challenges. This is why it’s smart to talk with your insurance company before putting a deposit down on a new place.

Another factor that the insurance company looks at is your daily commute. When you call to change your address, the company will probably ask to update some other information, including how far you drive to work.

The reason for this is very simple. The more time you spend on the road, the more likely you are to have an accident. If you move further from work, your insurance company may respond by increasing your rates slightly.

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The good news is that you may qualify for a price break if you move closer to work and shrink your commute. There are some cities that have a reputation for higher insurance rates, so you may want to avoid them completely.

If you’re looking at making a move to any of these expensive areas, then you may want to look at the outlying cities instead:

  • Detroit
  • New York
  • Miami and Fort Lauderdale
  • Los Angeles
  • Atlanta

These are all big cities with big premiums, but there are some exceptions to this rule. Cleveland, Charlotte, and Pittsburgh all have rate levels that are below the national average.

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Different States, Different Laws

Louisiana is out in the country with many rural areas, yet it has the fourth-highest insurance rates in the country. This is due to the high rate of lawsuits combined with poor road conditions.

It also has a Direct Action Statute that allows people to sue insurance companies directly, and that leads to more losses for the company.

People who move to this state are often surprised by the high jump in their rates. This is why it’s vital that you check with your insurance company before finalizing a move.

While shopping around may help you save a certain amount, you want to be sure that you’ll have the right coverage since the legal environment in this state seems to encourage lawsuits.

Another challenge with car insurance is that different states can dictate what type of coverage you have. This can drive your rates up or allow them to drop depending on the state. Here are just a few ways that state governments can force a change in your existing insurance plan:

  • Setting higher minimum insurance requirements
  • Passing regulations that prevent insurers from using some types of information

Surprisingly, your rates can even go up because you rent a property rather than owning your own property. The average difference nationwide is seven percent, but even that small number can equal more than a hundred dollars annually.

If you’re considering making the move from an apartment into your own home, then you’ll want to keep this information in mind. The savings in insurance premiums can help cover other insurance premiums like your homeowner’s insurance.

Notify Your Insurance Company When You Move

If you discover that your new ZIP code is more costly with insurance, then you may be tempted to keep the move to yourself. However, you must inform your insurance provider of the change in address.

Failing to do so can be considered a breach of contract, and your company may:

Avoid problems down the road by being upfront with your company ahead of time.

If you discover that your rates will rise too much, then you can take some time to compare rates and search for better premiums.

When you know what to expect with your insurance, you can budget accordingly. As soon as you know that a move is in your future, talk with your insurance company about the likely changes.

You just may discover that buying a house in another ZIP code will actually save you money. Compare car insurance quotes today.

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