What Influences Car Insurance Rates And Why?

Location

Location is one of the largest factors in how an insurance company determines your rate, and different areas have different rates due to geographical risks associated with certain areas. Urban areas, for example, have more congestion and traffic, meaning the risk of a customer getting into an accident and needing to file a claim is much higher. Areas that experience hurricanes or floods are also high-risk areas due to the chance of a customer experiencing a total loss during a storm and needing a replacement after the storm has passed. Some areas are notorious for car theft, so it is important for insurance companies to take that into factor as well.

Though no states prohibit insurance companies from utilizing a customer's location to determine their insurance rates, some states require insurance companies examine other factors before considering the area as a factor.