Car insurance may be a necessity, but it can also become a huge expense if you did not budget for the cost. While insurance companies do use a variety of different factors to calculate premiums for each policyholder, one factor that is used in each and every state is local statistics. While a number of states are known for having high insurance rates, there are quite a few cities that have high rates as well. Knowing which cities have the highest rates throughout the nation, and why the rates in these cities are so high will help you continue to be an informed consumer.
The Average Auto Insurance Rates in the Nation
While insurance rates are extremely personalized, by averaging all of the high and low premiums throughout the nation, researchers with the National Association of Insurance Commissioners have announced that the average cost of car insurance in the nation is $785 per year. While Washington D.C., New Jersey, and Louisiana have all been reported as the most expensive states to buy insurance, some of the most expensive cities to buy insurance are not even found in these states. Here is a list of the
10 most expensive cities for car insurance with the average rate reported in those cities:
10. Springfield Gardens, NY $3213
9. St. Albans, NY $3233
8. Allison, TX $3385
7. Bronx, NY $3443
6. Grosse Pointe Park, MI $3504
5. Detroit, MI $3709
4. Brooklyn, NY $3819
3. Fort Hamilton, NY $3947
2. Hamtramck, MI $3953
1. Highland Park, MI $4214
Why Are the Rates So High in These Cities?
You may be wondering why rates can differ so dramatically in the same state. One of the main reasons why rates are so high in specific cities is because your base rate of insurance starts with your zip code. The insurance company will use the statistics within that zip code to calculate your rates, and a high amount of claims and a high ratio of accidents is going to increase the risk that insurance companies take in. In an industry where risk is everything, it is understandable that insurers must label the high-risk cities and charge adequate premiums.
If your city is on the list of high-risk cities, you should do everything in your power to buy a vehicle that costs less to insure. Take advantage of discounts, keep your driving record clean, and you may be able to keep your premiums below the average.