If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

The fact that a person’s zip code affects his/her auto insurance rate isn’t as apparent as the effect it has on their home owners’ policy. But it does have a huge effect.

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. We all know that your annual mileage partly determines the risk an insurer carries by insuring you. If you live far from places you drive to daily, your mileage will be a lot higher than if you lived a lot closer.

Take your place of work as an example: If your home is 10 Km from your office and you drive there five days a week, you’ll accumulate twice as much mileage as your neighbor whose office is just 5km away.

Furthermore, living in a city that does NOT have a standard mass transit system will force you to drive more often. Apart from the fact that this will raise your mileage, it will also increase wear and tear which in turn will have an impact on your auto insurance rate (at least in the near future).

2. If your home is in a high crime zone, you’ll definitely get higher rates. This is because you are exposed to a higher 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.

Tags: Auto

Popularity: 27% [?]