Car Insurance Companys - Can an Auto Insurance Company Charge More Based on Location?
The Truth About Car Insurance Companies
Q: Are car insurance companys permitted to charge more for a policy simply because a person lives in a low income area? My sister lives in a better neighborhood, but has had accidents and my insurance costs more. Is this allowed?
A: Unfortunately it is. It does not seem right that location would impact insurance rates, but it is one of the factors that is included when formulating a quote for auto insurance.
Insurance policies are all based on statistics and the statistics are not in your favor if you live in a less affluent community.
The people who put these statistics together are called actuaries and they use the numbers to predict the likelihood that a person will be involved in an auto accident. The statistics show that people in less affluent communities are more likely to be involved in a car accident.
Due to this the company is allowed to charge more for a premium in poorer neighborhoods.
A good way to lower your premiums is to get multiple quotes when shopping for car insurance. Also see if there are any applicable discounts for you.
Sorry to be the bearer of bad news, but car insurance companies have been, and will continue to, charge more for policies that are taken out by people in less affluent communities.
We strongly recommend that you get online and obtain multiple auto insurance quotes from a variety of providers. This will ensure that you wind up with the best coverage possible at the cheapest price.
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