You may or may not realize that the zip code of where you park your car at night actually affects your auto insurance rates. Some people may immediately become offended or put off by this, assuming that this has something to do with the desirability of their neighborhood, or if they live in an area that is predominantly a particular race or culture they assume it's some type of prejudice. In reality, the zip code where you live or park your car at night affects your auto insurance in many ways and none of them have to do with these factors.
Insurance companies live and breathe statistics and use these facts and figures in many ways when figuring rates. When it comes to auto insurance, they do indeed consider crime statistics when determining full coverage rates. Obviously if you live in an area that has a lot of crime, they are taking a bigger risk in insuring your auto when it comes to theft and vandalism, as opposed to a city or neighborhood that doesn't have that much crime reported. This isn't meant as an insult to those that live there, but again, it simply has to do with that risk they are taking in providing the coverage. You might put yourself in the position of the auto insurance carrier - wouldn't you charge more for vehicles parked in high crime neighborhoods than for those that aren't?
Another way that your zip code affects your auto insurance rates has to do with traffic congestion and the number of cars that are registered in that neighborhood. The more traffic and the more congestion, the more likely you are to get in an accident. It's just a matter of the data and statistics again. The carrier is taking on more risk when they insure a car in a congested area than when they insure one where there aren't that many cars on the road. This type of thinking is why they ask you how many miles you travel to and from work when composing an auto insurance quote; the more miles you travel every single day, the more risk you have of being in an accident.
So you see how your auto insurance rate is affected by your zip code, and it's understandable why a carrier would figure these things into their coverage and premium rates. The more risk they take on, the higher your costs will be. If your neighborhood is considered "high risk" as far as your vehicle is concerned whether it be because of crime or traffic or other cars, then your rates will be higher.
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