7/13/2012 8:52 PM ET|
Where car policies cost most, least
Your address can mean the difference between $730 in annual car insurance payments and more than 5 times that amount.
If only you could top off your car's cheap insurance the next time you were in Arizona.
Bullhead City, Ariz., is the least expensive town in the U.S. to buy car insurance. A 40-year-old male with a clean driving record in a 2012 Honda Accord would pay $730 a year, according to a new CarInsurance.com analysis of insurance rates in every U.S. ZIP code. For each town, we averaged insurance rates for all ZIP codes (most towns contain more than one) to find the most and least expensive places to buy car insurance.
That Bullhead City driver could:
- Move a couple of miles to Laughlin, Nev., just across the Colorado River, and watch his rates zoom 70%, to $1,280 a year.
- Head to New Orleans, where moving across town could make rates rise by 33%, or $872.
- Try Manhattan, where within the 24 square miles of the island, the same driver in the same car could pay as little as $1,772 or as much as $2,847.
The most expensive town to buy car insurance in the U.S. is Highland Park, Mich., where the Accord driver would pay an astounding $4,214 a year. That's without any accidents, DUIs, speeding tickets or bad credit. (Use CarInsurance.com's "Nosy Neighbor" tool to compare average rates anywhere in the country.)
|10 least expensive areas to insure a car|
|1. Bullhead City, Ariz.||On the Colorado River, opposite the casino destination of Laughlin, Nev.||$730|
|2. Chloride, Ariz.||The oldest continuously inhabited mining town in Arizona||$731|
|3. Oatman, Ariz.||Clark Gable and Carole Lombard honeymooned here, on the old U.S. Route 66||$731|
|4. Pine Point, Maine||Known for lighthouses, lobster and beaches||$733|
|5. West Scarborough, Maine||Woodsy area of Scarborough, split by the Nonesuch River||$733|
|6. Lake Havasu City, Ariz.||Reassembled London Bridge, Arizona's second-largest tourist attraction||$734|
|7. Cumberland Foreside, Maine||Portland suburb; "foreside" means it's on the beach||$735|
|8. Amity, Maine||Moose country; 2011 population: 186||$736|
|9. Ashland, Maine||"Crossroads of the Maine North Woods"||$736|
|10. Blaine, Maine||Named for then-Speaker of the House James G. Blaine||$736|
|10 most expensive areas to insure a car|
|1. Highland Park, Mich.||Home of the first Ford assembly line||$4,214|
|2. Hamtramck, Mich.||Along with No. 1 Highland Park, surrounded by Detroit||$3,953|
|3. Fort Hamilton, N.Y.||In the shadow of the Verrazano-Narrows Bridge||$3,947|
|4. Brooklyn, N.Y.||The most populous of the five New York boroughs||$3,819|
|5. Detroit||Known at its height as "the Paris of the West"||$3,709|
|6. Grosse Pointe Park, Mich.||Tony suburb just east of Detroit||$3,504|
|7. Bronx, N.Y.||Home of the New York Yankees and the Bronx Zoo||$3,443|
|8. Allison, Texas||Atop a gas field known as the world's largest producer of helium||$3,385|
|9. St. Albans, N.Y.||Once home to CountBasie and Lena Horne||$3,233|
|10. Springfield Gardens, N.Y.||Just north of John F. Kennedy International Airport||$3,213|
It's all about the insurance claims
If you live in a particular ZIP code, your rate starts with that ZIP's base insurance rate -- whether your home is a mansion or a hovel.
Insurance companies group ZIP codes into different risk categories based on the number and severity of claims. "Territorial rating," as the practice is known, is used to produce a base rate that is the starting point for anyone seeking insurance coverage in most states.
A few states limit the use of territories as a primary rating factor. California, for example, requires insurance companies to calculate rates based on driving records and miles driven before considering location. But there's no getting around the impact of a high-risk address. Auto insurance rates in Los Angeles are 150% higher than those a hundred miles north in Santa Barbara.
"The differences in risk are pretty sizable," says Pete Moraga, a spokesman for the nonprofit Insurance Information Network of California. "Santa Barbara doesn't have the traffic or theft or vandalism that Los Angeles does."
Critics of territorial pricing say the poor are penalized for their addresses rather than for their driving history.
"I don't think any consumer would consider it fair that your address matters more than your driving record," says Mark Savage, a staff attorney for Consumers Union, which successfully pushed California regulators to emphasize driving experience, miles driven and driving record over ZIP code.
If all location-based rates were eliminated, Moraga says, those currently paying the least would face rising premiums. "It's a balancing act," he says. "Insurance is all about pricing risk fairly so that those with higher risk are paying what they should."
More from CarInsurance.com:
- How much does raising deductibles save you?
- When to drop collision and comprehensive
- How to insure a new car
You have to shop around
Discounts and surcharges are calculated from your base territorial rate. If your base rate is high, the consequences of any accident or violation you have are magnified.
For example, one insurance company charges $844 for basic liability coverage to residents of the 98101 ZIP code in Seattle, but it charges just $341 for residents in 98926 in rural Ellensburg, Wash.
Now add in a DUI surcharge, multiplying that base rate by 1.5 (most companies would penalize even more heavily). In Seattle, that driver with basic liability now pays $1,266. In Ellensburg, the same driver pays $511.
In most states, every part of your policy is affected by the territorial rate. That's why comparing car insurance quotes becomes all the more important, says Penny Gusner, CarInsurance.com's consumer analyst.
"These companies all have differing claims experiences in your ZIP code," Gusner says. "The quotes you get are likely to reflect that. One insurer may put your area into a high-risk bucket, and another may not."
For example, the average rate from six major insurance carriers for ZIP code 48101 in Dearborn, Mich., was $2,522 -- but that included rates as low as $1,776 and as high as $4,374.
CarInsurance.com commissioned Quadrant Information Services to provide a report of average auto insurance rates for a 2012 Honda Accord for every ZIP code in the United States. We calculated rates using data for six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm).
Averages are based on insurance for a single 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. This hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Average rates are for comparative purposes. Your own rate will depend on your personal factors and vehicle.
More from CarInsurance.com:
VIDEO ON MSN MONEY
First off, MSM police your site for spam, it is getting ridiculous.
Second, I agree with site-specific costing. I spent some time in Memphis, and that place had some of the worst driving I have ever seen.
What was really interesting was to watch a fender-bender occur, some pretty serious, and watch as BOTH drivers raced away. No registration? No insurance? Stolen? Warrants?
Whatever, if you drive there you are at a higher risk, and I don't need to subsidize your community's lack of driving ability compounded by apparent criminal activity through my insurance.
I live 80 Miles north of NYC, and pay 432 Dollars a year for a Buick Road Master(2x216)--if you buy cars that can usually take the killer impact better (far safer), even though the Corvette Engine, but I guess young blooth, want bigger mufflers, instead of bigger/real engines, and far better stability!
Remember an old station Wagon, still is/ was the safest car in an accident!, but I guess the tall SUV (flip over) and "short" wheelbase suits the average modern mind better, fitting the FB standard!!--Auch!
POORLY WRITTEN ARTICLE..again. Useless information.
The problem with high insurance auto rates is not caused by the insurance companies. Everything auto insurance pays out on claims are very costly,ie, hospital and doctor bills, body shop parts and labor costs, and lawyer fees. If you want insurance rates to come down,then control medical costs, ask the bodyshops to lower their labor rates,ask the auto industry to control their prices on autos and their repair parts, and stop the volume of lawsuits that are clogging our court systems.
Reduce crime, improve our roads, highways, and traffic patterns,stop texting and driving,pay 100% attention to the road. Improve public transportation to encourage commuters to leave their cars at home. All bars,taverns, and restaurant should have a service in place to help intoxicated patrons get home safely.
Set thresholds on injuries before any lawsuit can be filed, and if you sue on a groundless case and lose,then you pay all court costs as punishment for filing frivolusly.
Did you know nearly 40,000 were killed, & almost 3,000,000 injured on the nation's highways last year. And that's just your fellow Americans. If a foreign country did this to us, you'd be screaming for the president to push the button. Private ownership of automobiles is a concpet that's failed.
Give it up! Leave driving to professionals.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.