@Progressive Blog

Does Where You Live Affect Your Auto Insurance Premium?

Posted by Allison Ruuska on 1/21/2008 at 1:00 PM

Several factors affect the price you pay for auto insurance — your age, driving record, type of vehicle, etc. — but did you know where you live also affects your premium?


It's true: Your location directly impacts your insurance rate. In fact, most insurance companies, including Progressive, consider where you live when they price policies.

Generally, city dwellers pay more for auto insurance than rural dwellers. Why? Because auto premiums are largely determined by factors related to the frequency and amount of a claim payout. Logically, cities have much denser populations than the country, so the risk for an accident is much higher in urban areas than it is in rural areas. Because of this, you most likely will pay more if you live in the city than if you live in the country.

Let's look at some of the locational factors that may come into play when determining how much you pay for auto insurance.

Frequency of Loss

As mentioned already, living in an area with a higher population increases the risk of an accident. Since cities have more people, they generally have more accidents, too. Therefore, if accidents happen more often in a specified area, the price for insurance will be higher since the chance for a claim is higher.


Alongside frequency of loss comes density. The more people in a given area, the higher the risk of human error that can cause accidents. Fewer people travel country roads, so the accident risk factor is lower in rural areas. Hence, those who live in the country most likely will pay less for insurance than those in the city.

Safety Services

The availability of safety services influences locational considerations, too. Safety services include:

  • Response times for police, fire departments and ambulances
  • Road maintenance in inclement weather
  • Enforcement patterns, such as how well laws are implemented by municipalities and law enforcement
  • How roads are designed
  • Number of intersections in a given area

Areas that have fast response times, aggressive enforcement of laws, well-designed roads and intersections, and other positive safety services will be considered safer areas than those whose safety services aren't as available.


If you live in an area where snow or other inclement weather is a common occurrence, your insurance premium may be higher. Treacherous road conditions can raise your chances of being involved in an accident while driving, which means the risk for a claim is higher.

Theft/Vandalism Rates

In areas that suffer from high crime rates, the risk of a vehicle theft or vandalism is greater. If break-ins occur frequently in your neighborhood, you can expect that you'll be paying more for insurance.

Litigation Climate

Another factor is the litigation climate in your area. Is there a higher propensity to sue after an accident? Insurance companies may look at this — and they may even examine the number of lawyers per square mile — to help gauge the litigation risk in your area.

Though many factors are considered when pricing insurance policies, location is an important one that can directly impact what you pay for auto insurance.

The information in this blog may vary based on your particular state or situation. Always refer to your insurance policy for your specific coverages.

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for a teenager, does their driver's license have to reflect their "legal" address or can they put whatever address and then get insurance under that address? How does the insurance company validate the address of the driver versus the address of the vehicle? Divorced - dad is providing the vehicle, minor lives with mom in different zip code. Minor can't have vehicle until January 2013 so it is at dad's but once minor get's possession it will be in a different zip code and the minor was told to put his address on the permit, which is not her legal address.
Posted on 9/17/2012 at 2:14 PM by D R Schroeder
@D R: We base a policy on the ZIP code where the driver keeps the vehicle. The driver's mailing address can be different, if he or she chooses. In terms of providing accurate information, failure to do so could affect coverage.
Posted on 9/25/2012 at 9:55 AM by Progressive

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