Why Car Insurance Rates Depend On The Neighborhood Where The Policyholder Lives

LOS ANGELES, Dec. 15, 2019 /PRNewswire/ -- Compare-autoinsurance.org has released a new blog post explaining how the neighborhood where clients live will influence auto insurance rates.

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Amongst the numerous factors used for rating a client, the area where the person lives will have a deep impact. Each particular region is characterized by a series of demographic, geographic and economic factors.

• Influential demographic factors. The most influential demographic factor is the population density - a higher population density automatically means more cars on the roads, And more cars present on the roads, translate into higher the chances of being involved in an accident. This is why people living in urban centers pay more, in comparison with those living in rural areas. Crime rates, especially vandalism, riots, and car thefts are also analyzed by insurers before issuing any coverage.
• Geographic factors include the geographic layout of the area, frequency of extreme weather phenomena and road infrastructure. For example, people living in coastal areas, where hurricanes are more frequent will pay more expensive premiums. Insurance companies also have special exclusions. A person cannot buy comprehensive car insurance after a hurricane or another natural disaster alert has been broadcast.
• Economic factors also impact insurance expenses. The most influential economic factor is the unemployment rate. A high rate is directly correlated with an increased number of insured and underinsured drivers. This is why in states with high car insurance rates we usually encounter a high number of uninsured drivers. The specialization of an area and the average income are also taken into consideration by carriers when analyzing rates.

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