Auto Insurance Rate — How Your Home Affects It
Posted on | August 21, 2008 |
Most people understand why their zip code affects their home insurance policy. However, they do NOT appreciate the impact on their auto insurance rate.
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.
A person who lives 15km from his/her office and drives there five days a week will have a mileage that is five times that of another who lives just 3km away. That means more risk to an insurer and higher rates for the insured.
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. Your place of residence has a crime rate. Is it high, low or very low? This will determine your auto insurance rates to a high extent. This is so because an area’s crime rate will affect your risk of theft and vandalism.
So when next you’re moving house, take some time out to calculate these other issues. The little savings you thought you made on the home might be totally wiped out by the higher auto insurance premiums you’d have incurred.
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.
But if you’re still about to buy a home don’t forget that if your zip code makes you pay $150 more annually that means $4,500 more in 30 years. So try getting and comparing quotes for different zip codes to find out an auto insurance-friendly neighborhood.
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