When auto insurance providers calculate an individual’s auto insurance rate, they take several factors into consideration, some of which are considered “Non-driving” factors, which means they are not related to your vehicle or your driving record. One of the most significant non-driving factors usually considered is the crime rate in your area. Insurance providers will look at your ZIP code when analyzing what your premium should be. Here is what you need to know about how crime rates impact auto insurance rates.
Crime Rate by Zip Code
Auto insurance companies usually use ZIP codes to check up the local crime rate in an individual’s area. This is the reason why insurers will ask you to provide your ZIP code when requesting a quote. They are looking for specific, auto-related crimes such as:
- Car theft
- Hit and runs
- Fender benders
- Accident rates
How Crime Rates Impact Your Auto Insurance Rate
Insurers will calculate your auto rate based on how likely they think you are going to file for an insurance claim. The more likely the insurer assumes you will file for a claim, the higher your auto rates will be. When you live or park your car in an area with a high crime rate, they will spontaneously assume that it is at greater risk of getting stolen, vandalized, damaged in a hit and run, etc. Since most insurance plans cover these types of issues, auto insurance providers will look to protect themselves by increasing their rates. In contrast, if your neighborhood has lower crime rates, you will have access to lower rates.