Does Your Zip Code Influence Your Car Insurance Rate?

When it comes to paying for car insurance, there are some things you can control, and a lot of things you can’t. Insurance underwriters consider a wide array of factors when determining risk and assessing how much you should pay for your monthly premiums. One major factor is something you can’t change very easily: where you live. Your zip code plays a central part in how much you’ll end up paying for your car insurance.

Why Do Insurers Take Zip Code Into Account?

On its face, one of the major reasons insurance companies consider zip code has to do with the likelihood of an accident. Both rural and urban areas carry different kinds of risks when it comes to traffic accidents. In major cities, the density of traffic and population can create a lot more opportunities for things to go wrong, and minor accidents like fender-benders are exceedingly common.

However, rural areas can also be hazardous, as high (or no) speed limits and long, empty stretches of road (where drivers can easily doze and run off the road) pose their own kind of risks. There’s also the question of crime, theft, vandalism, and the frequency of natural disasters and extreme weather events, as well as things like the number of uninsured or underinsured drivers on the road. Your state, your city, even your neighborhood can make a big impact on your insurance premiums.

But some trends in the insurance market have made this practice questionable. Studies have shown that many insurance companies disproportionately target areas with low-income and minority populations for higher car insurance premiums. Some also feel that the areas just outside cities are safer to drive in than urban centers, and so shouldn’t pay as much as those living within the city proper. Still others are of the opinion that nothing should be factored into insurance risk assessment beyond driving record and number of miles traveled.

Which Pennsylvania Cities Have the Best (and Worst) Rates

Unfortunately, your zip code does play a major part in how much you’ll pay for your auto insurance, particularly if you live in a bigger city with higher traffic density. Let’s take some cities in Pennsylvania, for example. The Zebra’s Kristine Lee has some data on some of the most expensive cities in Pennsylvania to insure your vehicle:

  • Erie: $1,790
  • Scranton: $1,864
  • Pittsburgh: $1,867
  • Allentown: $1,874
  • Philadelphia: $3,315

It should come as no surprise that Philadelphia ranks among the most expensive cities when it comes to auto insurance — it was listed as the worst city in the US for drivers in 2022, not just for traffic accidents and driving hazards, but long commutes and time spent in traffic.

Other Factors That Affect Your Car Insurance Premiums

Of course, your location is far from the only thing that determines your auto insurance rates. Some factors are commonly known and self-evident: your driving record, for example, as well as your claims history and whether or not you’ve been convicted for a traffic violation such as a DUI. And any parent can tell you that teenagers pay more for their car insurance than any other demographic.

But there are several other elements that factor into your car insurance premiums as well:

  • The age of your car. Older vehicles cost less to repair and replace. Conversely, new cars have more sophisticated systems and often cost a lot more to repair, especially electric vehicles.
  • The make and model of your car. Unfortunately, some vehicles are magnets for thieves and are much more likely to get stolen.
  • Your credit rating. Although the practice is already banned in some states, having a poor credit rating can mean paying more for your insurance.
  • Coverage. How high you choose to set your deductible, as well as what level of coverage you select, will make a big difference in your monthly premiums.
  • Home ownership also plays a major role, as does marital status — both are considered reliable indicators of financial responsibility and stability. Education and occupation can affect insurance premiums for the same reason.
  • While there is a call to ban this practice as well, it’s common for gender to factor into your insurance risk (male drivers tend to pay more, as they are far more likely to get into traffic incidents).

How You Can Get Cheap Pennsylvania Car Insurance

Are your insurance premiums too high? Here’s what you can do as a Pennsylvania driver to help lower your car insurance rates.

  • Shop around and compare quotes to find the best cheap Pennsylvania car insurance.
  • Take a defensive driving course.
  • Install anti-theft or safety devices on your vehicle.
  • Adjust your deductible or coverage level.
  • Bundle your home and auto insurance together.
  • Ask your insurer about potential discounts, such as low mileage, occupational discounts, good student discounts, and more.