Laura Berry is a former State Farm insurance producer and insurance expert.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 15, 2021

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Important facts to know...

  • Vehicle owners are required to buy auto insurance in the state where the vehicle is registered to satisfy the law
  • Rates in some states are higher than rates in others simply because of operating expenses and coverage requirements
  • Not only can the state you live in affect your rates, the zip code you’re in can have a bearing on your personal rates
  • If you move in-state, your rates can change because of the number of claims filed in the zip that you’re moving to
  • When moving out-of-state, you have to start a new auto insurance policy written under the new state’s laws so your rates will change

So many different life events can have an effect on your auto insurance premiums. These life events can include:

  • buying a new car
  • letting a friend move in
  • changing jobs

Another factor that can impact all types of your insurance is if you’re planning to move. Before you make an offer or pack up your belongings, you need to be sure to get your insurance in order.

You may not see the hurry in notifying your insurance company of an impending move, but your insurance carrier wants to know your insured address at all times.

Where you live definitely plays a role in risk, and that’s why it can impact your rates when you change addresses.

Compare car insurance rates today to make sure you don’t pay too much for the coverage you need.

Where are auto insurance rates the highest?

If you look at national averages, consumers pay about $841 per year for their insurance. This number factors in all of the average costs to give you a look at the big picture, but some states have much higher averages than others.

Some of the states with the highest insurance expenditures include:

  • New Jersey – $1,254
  • Washington DC – $1,187
  • New York – $1,181
  • Louisiana – $1,146
  • Florida – $1,143
  • Michigan – $1,131

Expensive states for car insurance usually have high-density cities, more uninsured motorists, and insurance claims that raise premiums. Cheaper states for car insurance usually have lower population density and a competitive car insurance market.

Not only does it matter what state you live in, it also matters what city you live in. Some states that don’t even make the list of costliest places to insure a car are home to cities with extremely high premium averages.

Here’s a list of the most expensive cities for car insurance:

  • Detroit, MI – $10,723
  • New Orleans, LA – $4,310
  • Newark, NJ – $3,525
  • Baton Rouge, LA – $3,364
  • Hialeah, FL – $3,272
  • Jersey City, NJ – $3,267

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Why do auto insurance rates vary by state?

Each state has its own required coverages and limits, therefore rates may vary due to this factor and other factors as well.

Location matters to all insurance companies, so if you move somewhere else, you might face different insurance premiums.

Not all states have high auto insurance requirements. In some states, officials have enacted laws where people can legally drive with just $10,000 in auto insurance coverage.

Other legislatures have passed more stringent laws where drivers must carry higher limits of liability insurance and even medical payments coverage for themselves.

What’s required in your state will definitely play a role in statewide averages.

You need to look and see if you can carry strictly the minimum liability coverage or if you’re going to have to buy other forms of mandatory coverage that will drive your rates up.

The number of personal injury claims and damage claims filed will also affect the rate filings of a majority of the insurers in the state.

How can your move affect different personal rating factors?

Base rates and gross rates are calculated before you even start applying for insurance.

Once you start to give your personal information, an agent will modify the gross rate per unit of coverage depending on how much risk you present. It’s all of your rating factors that are used to give you a personal rate quote.

If you’re going to plan on moving, you can affect more than just one of your personal rating factors. In-state and out-of-state moves can both lead to a change in your rate. The rate could go down, but it’s also possible for it to go up.

Here are a few ways your move affects your personal rating factors and rate class:

Garaging Address

Your garaging address can have a very big impact on your rates. If you change your mailing address, it won’t lead to a rate change, but changing your garaging address could if you’re in a new zip code. Some zip codes are deemed to be riskier than others.

When you’re moving to another property in the same state, you can endorse your auto policy without having to make any other changes.

After updating your zip code, the insurer will look at the following statistics of that zip code to determine your rates:

  • population
  • accident rates
  • past claims
  • total settlement average of claims

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If you’re taking the leap and you’re buying a property, it could have a positive effect on your rates. Renters don’t receive homeownership credits. If you buy a condo, a townhouse, or a single-family home, you could be seen as less of a risk for filing an insurance claim.

Vehicle Usage

Many people move to reduce their commutes. If you’re tired of driving 30+ miles to work every day, your move could save money on your auto insurance. When you go from a long commute to a short commute, your rates will drop.

You’ll also see a difference if you start carpooling to work or you work from home and you become a pleasure driver.

Annual Mileage

The less you drive the fewer accidents you’re likely to have. Auto insurance companies prefer that you keep your annual mileage low. To offer an incentive, you can get a low-mileage discount when you reduce how much you drive.

When you move closer to your family or work, you’re likely to drive less each year.

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What do you do if you’re driving out of state?

If you’re going to move to a new state, you’ll have to comply with new laws. You can keep your old coverage until you transfer your tags. Once you have a registration in your new state, you’ll have to get new quotes for coverage that complies with the auto insurance laws.

If you don’t, you could be fined.

No one wants to pay more for insurance just because they moved a few miles from their last home. If you are paying more, understand why your rates are changing. When you’re still not happy, you should seek out new rate quotes for comparison purposes.

Use our free rate tool and get instant quotes with your new zip code today.