All this time that drivers have fussed over whether the colour and cost of their cars would bump up their insurance premiums, they’ve been missing one of the factors that matters most: their ZIP code.
Take Arizona for example. Four cities in this Southwestern hotspot are among the top 10 cheapest places for car insurance, where consumers pay an average $3,483 less than the most expensive city, Detroit, according to Business Insider contributor Carinsurnace.com.
“Metro Detroit and rural Arizona are a world apart,” said Des Toups, managing editor of CarInsurance.com. “What’s really astounding is the difference between ZIP codes that are almost next door to each other.”
(See below for a full list of the 10 10 least and most expensive cities)
Just look at these examples of vastly different insurance rates for the same cars driven in different zip codes:
- Detroit: From ZIP code 48240 to 48227, premiums rise by $2,365 (106 per cent).
- Los Angeles: From ZIP code 90045 to 90005, premiums rise by $789 (47 per cent).
- New Orleans: From ZIP code 70124 to 70117, premiums rise by $872 (33 per cent)
The discrepancies have little to do with the makes and models of cars and much to do with crime. Cities with high rates of accidents and theft claims typically see higher insurance premiums because companies lump certain zip codes together into “risk categories.”
Of course, it’s probably not logical to put your house up for sale just to save a few hundred bucks each year. But you can learn to negotiate by shopping around for the best premiums in your area. Should be easy enough to accomplish, as nearly all insurance companies feature their own tools for quotes.
CarInsurance.com has introduced its own Nosy neighbour Car Insurance Tool to show drivers premiums in zip codes across the country. Just plugging in BI’s ZIP code revealed drivers pay about half as much as their neighbours in Brooklyn.