Why Do Auto Insurance Rates Differ from State-to-state?

Thursday, April 12, 2018

Why Do Auto Insurance Rates Differ from State-to-state?

Drivers want low auto insurance rates. No one wants to overpay for them. Yet, rates vary significantly from one driver to the next. They also vary by location. If you paid one rate in New York, you may pay less if you lived in Vermont. Rates can even vary from town to town, from neighborhood to neighborhood. A variety of factors cause this difference. That is why it is best for each individual to request a quote to learn what their rate is.

What Are the Risks in That Area?
Risk defines car insurance rates. Insurance companies set rates based on how much risk this policy is to the company. How likely is it that someone will have to file a claim? Sometimes you can control those factors. For example, drivers without points on their license often pay less. As a safe driver, you present less risk to the insurer. That is an easy way to see the difference.

In other cases, you cannot control the factors related to the risk. Here are some examples why rates differ from one state to the next.

These factors play a role in what you will pay. However, your personal risk levels play an even bigger role. You do not have to worry about auto insurance rates being too high if you are a safe driver. Avoid reckless driving claims. Avoid having to file numerous car insurance claims. And, be sure you keep your policy in place. You’ll pay less as a result.