I'm Mad I Didn't Know About This Surprise Expense When I Moved
Ahead of our last move, my husband and I kept a pretty detailed budget spreadsheet, planning for our new fixed expenses (like an increase in property taxes) and our one-time purchases (things like moving boxes) so that we’d know how much money we’d have after every deal went through. But there was one expense I never saw coming with our move: My car insurance premium shot up — by almost $400 a year.
Right around the time we moved, I had to renew my car insurance. I typically pay for my insurance six months in advance to get a “paid-in-full discount.” I hadn’t been at fault in any accidents nor had I received any speeding tickets, and my rate stayed the same until I plugged in my new zip code. Then, my new rate went up by $196 for the six-month period — plus, I owed a prorated amount on my last policy for the month I had been at my new house.
I was very surprised that my rate was going up now. In my last neighborhood, my catalytic converter had been stolen while my car was parked at my local rapid transit station — and my parked car had been hit on the somewhat busy street in front of my house. Our new home has a garage and is on a quieter street, so I was expecting my insurance rates might even go down a bit.
As it turns out, where you live has a major influence on how much you pay for car insurance, according to industry experts I’ve talked to.
In fact, just crossing a major road or highway can change your rates, says Greg Martin, president of Think Safe Insurance.
“Insurance companies break areas into ‘rating zones,’ and your zip code is one of the key factors,” Martin says. “They look at things like accident frequency, theft rates, and even how much it costs to repair cars in that area. So your zip code could mean you’re paying a lot more or a lot less depending on where you land.”
If you’re curious about how much your new premium will be when you move, you can call your insurance company and ask for a quote based on the address of places you’re looking to put an offer in on or looking to rent, Martin says.
(He’s been in a similar situation to the one I found myself in: “I moved to what I thought was a ‘safer’ area and was shocked when my rates went up,” Martin says. “Turns out, the area had higher repair costs and more expensive cars, which made claims pricier overall. So, it’s always good to double-check.”)
And, of course, auto insurance premiums have been increasing nationwide generally. Inflation, increased repair costs, more frequent and severe accidents, and higher medical costs are contributing to this trend, explains Maya Afilalo, an insurance industry analyst and senior editor at AutoInsurance.com.
Expensive technology in today’s cars is also driving up insurance costs, experts say.
“Cars are loaded with tech these days, and fixing a bumper now might mean recalibrating cameras or sensors,” Martin says. “Plus, used car prices have been way up, so insurance payouts for totaled cars are higher.”
One thing that can help you save money on your insurance premium is to rate shop (make sure you’re comparing similar coverage plans) or work with an insurance broker who can compare plans for you.
Insurers will often assess risks differently, says Alex Adekola, the CEO and founder of ReadyAdjuster, which is a resource site for independent adjusters. Some will prioritize factors such as how often you’ve filed claims, while others put more weight on credit scores or where you live.
“Getting quotes from multiple insurers will help you find where you can get the lowest rates,” Adekola says.
Another way to save is to purchase another type of insurance policy from the same company, like homeowners or renters insurance, Afialo says. “This is known as bundling, and most companies offer a pretty good discount for it,” she says.
In most states, insurance companies can take your credit score into account when they crunch the numbers to determine your premium, so improving your credit score can not only help you qualify for the best interest rate on a mortgage, but can also have a big impact on your insurance rates, Afialo says.
Further Reading
We Tested (and Rated!) Every Sofa at West Elm — Here Are the Best for Every Type of Need
Everything You’ve Ever Wanted To Know About Article’s DTC Furniture
