Many people want to know why their auto insurance premium is so much higher than a friend or family member that lives in another state or even close by. What a lot of people don't realize is that your zip code has huge impact on your auto insurance rates, so your rates could vary greatly from someone you know that lives 10 minutes away. Auto insurance companies look at your zip code to determine the crime rate, auto theft rate, population density, traffic accident statistics, etc. If you live in a major urban area, your auto insurance rates will probably be much more expensive than if you lived out in the country. Major cities have more people, more traffic, a higher risk of accidents, more people running red lights and stop signs, and usually have a higher crime rate. Also, if you live in an apartment complex, you will probably pay a higher premium than if you lived in a house.

When auto insurance companies are trying to determine your car insurance rate, the major deciding factor is how high of a risk are you to them. If they feel that where you live, you are more likely to file an accident claim, have a vehicle stolen, or get a ticket you will pay higher rates even if you're driving record is good. This is why insurance rates can vary dramatically for drivers that live just a few miles apart. If you are planning on moving, you might want to look at the crime rate and other factors before you do. Not only is this a good way to protect your family, but it can also help save money on your auto insurance.