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Geographic Location and Auto Insurance

Geographic location and auto insurance premiums are closely interrelated. Your geographic location is one of the biggest factors car insurance companies take into consideration when they set rates for coverage. Geography is important for a number of reasons. First of all, the distance your vehicle covers in a year impacts the risk of claims an insurer will have to take on. And second, the specific location where you live or work can bring higher or lower rates based on loss history for that location. Where you live has a lot to do with what you pay. Every state has different laws governing auto insurance. These laws are another location related variable that plays into the determination of auto insurance rates we pay as consumers. Understanding the many connections between geography and auto insurance prices can help us find ways to save money on our premiums and to make choices to drive down those rates.

Car Insurance for City Dwellers

There is a strong link between where drivers live and the prices they pay for insurance policies like fault based auto insurance as far as population density is concerned. City dwellers usually pay more for their insurance policies than their rural counterparts for more than one reason. Motorists who live and drive in the city have to always be on the lookout for other cars and for numerous other dangers and distractions. The risk of getting into a car accident or of having to file any other kind of auto insurance claim is generally much higher in the city than it is in the country.

City dwellers fight heavy traffic on their way to and from work or school. In some urban areas, even the term "rush hour" does not mean a whole lot because traffic is heavy around the clock. Add to this the fact that crime rates are higher including the crime of auto theft, and it is easy to see why living in an urban area can lead to higher insurance rates for drivers.

Country folk, on the other hand, usually do not face heavy traffic unless some errand takes them into town. This ties in closely to other risk factors that insurers use to set rates. Annual mileage and the type of driving we do (i.e. where we go and what we're there to accomplish) both contribute heavily to the prices we pay. Country drivers more often have garages where they can keep their cars at night, greatly reducing the chance of theft.

State Laws and Insurance Rates

Auto insurance law in the United States is dealt with at the state level of government. Over the years, the federal government has stepped in to oversee or make recommendations for oversight of certain areas of regulation and so forth. But the task of setting and administering auto insurance law is largely the responsibility of the individual state.

State laws governing auto insurance can significantly affect rates. For example, certain no fault states require a host of minimum mandatory forms of protection, while many other states only mandate liability insurance. And even the way laws are administered and interpreted can affect rates. The leeway courts have to determine monetary judgments in civil automotive liability cases and the ease with which claimants can open these cases contribute directly to the prices insurers have to charge in order to recover their losses in these cases. State oversight of auto insurance rules and the ways insurers cope with these rules go a long way toward determining the premiums drivers will have to pay to get their cars legally insured.

Fight High Auto Insurance Prices

If you live in a high priced area where average rates for auto insurance are very expensive, you could choose to move. But most people don't think car coverage is a good enough reason to pack up and go. Still, it could be a last straw for folks already thinking about it.

Short of moving, there are many different things motorists can do to deal with the high cost of home and car insurance and to try to keep their rates low. First and foremost, shop around and do not be content getting hammered with huge rate increases from your provider when there are plenty of other options available. Drivers should make sure they're getting all the options they're entitled to, such as defensive driving and good student discounts, and rebates for airbags and other passive restraint systems. Having multiple cars on a policy or having more than one insurance policy with a provider can save money as well.

There are numerous other discounts available that can vary from company to company. Make sure you get the best deal possible and hold insurers accountable for offering you their lowest price. Make up for high rates in your area by being proactive and learning about the relationship between geographic location and auto insurance.


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