Ask Kim

Car Insurance Rates: Location, Location, Location

Kimberly Lankford

Your premiums could be a lot higher -- or a lot lower -- in a different zip code.

I’m planning to move across town. Will that make a difference in what I pay for car insurance?

SEE ALSO: 10 Cheapest 2013 Car Models to Insure

It could. Insurers set car insurance premiums by determining the risk that you will file a claim. You may keep the same car and driving record but pay higher or lower premiums because of your new location. "One of the biggest and most misunderstood factors is location," says Des Toups, managing editor of "The difference by zip code can be hundreds of dollars."

For example, your rates could rise if your insurer has had to pay more theft claims in your new zip code or if more people tend to have accidents in your area. Other factors can make a difference, too -- for example, the risk rises if you move from a house with a garage to one with street parking only, and you could lose a low-mileage discount if you have a longer daily commute from your new home.

Advertisement studied prices by location and discovered a big range by zip code for the same person and car, based on average prices from six large insurers. For example, a 40-year-old man with a clean driving record who owns a 2012 Honda Accord would pay an average of $2,032 per year if he lived in Baltimore’s Fells Point neighborhood. But if he moved just north of the city, to suburban Towson, his average rate would drop to $1,461, even if he kept the same level of coverage.

Moving across a state border can make a big difference, too – even if you don’t move very far – because your new state might have laws that affect coverage and competition. That 40-year-old man would pay an average of $730 per year if he moved to Bullhead City, Ariz. (the least-expensive town in the study). But he’d pay an average of $1,280 if he moved just a few miles across the Colorado River, to Laughlin, Nev. You can compare average rates by zip code at

For information about other things that can affect your rates for auto, home, life and health insurance, see 5 Surprising Factors That Can Raise Your Insurance Premiums.

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