It’s not just your state. It’s also your ZIP code. Urban dwellers generally pay more for insurance than rural residents, with premiums sometimes tripling when you move from the farm to the city.
A resident of the bucolic Finger Lakes community of Corning, New York, for example, could face a 265 percent increase in insurance just by relocating to Brooklyn. That’s a hike of nearly $3,000 a year.
“I think a good number of folks – though certainly still not all – know that car insurance costs vary by state,” said Alyssa Connolly of auto insurance comparison website The Zebra. “However, when they find out it varies by as granular a variable as a ZIP code – and that they could pay a different amount for insurance than their friend two blocks away – they’re frustrated and confused.”
The Zebra examined more than 61 million rates across the country for its 2019 State of the Auto Insurance Report and shared some of its data with GateHouse Media. The numbers reveal vast disparities based on not only geography, but the type of vehicle and the driving history.
Rates also fluctuate with seemingly unrelated factors, like gender, marital status, educational attainment and credit rating.
Sometimes they increase for no apparent reason at all.
Rachel Bruen’s premium jumped 25 percent in May when her policy automatically renewed, the Pennsylvania graphic designer said.
“I wasn’t in a car accident, never got any speeding ticket, nothing,” Bruen said. “But it just went up by, like, $15 a month for no reason.”
Bruen was paying $708 annually on her 4-year-old Subaru Impreza – about half the average price for her ZIP code in the southeastern community of Reading. But she owns her own home, has a good driving record, and her vehicle is among the least costly to insure.
“They have been doing this to me every time my policy updates,” Bruen said. “I usually call them, and then they always drop it again. I guess they’re banking on me not complaining.”
But after two weeks of calling her insurance company and getting no answer, Bruen said she switched to Geico and got a better deal. Her rate dropped to $636.
Women pay more than men
Annual auto insurance premiums have risen about 23 percent nationally since 2011, when they were at an average of $1,194, according to The Zebra.
The country’s inflation rate, by comparison, climbed by just half that during the same period.
In Ohio, the average annual cost of auto insurance for the profile of that 30-year-old male driver rose from $824 in 2011 to $1,032 in 2017, an increase of more than 25 percent. But still well under the national average. It was $1,032 again in 2018. Of the border states besides Michigan, it’s $1,420 in West Virginia, $1,390 in Pennsylvania, $1,150 in Indiana and $1,898 in Kentucky.
In Ohio, an average female paid slightly more, an average of $1,038 last year versus $1,032 (to find out what you pay, go to this interactive site).
States with the biggest rate hikes include Colorado, Rhode Island, Louisiana, California and Florida – all of which jumped by at least 50 percent. Colorado’s average rates nearly doubled from $944 to $1,682.
Just seven states saw reductions: Maine, Hawaii, New Mexico, New York, Arkansas, Connecticut and Oklahoma. Oklahomans saved an average of $379 on car insurance premiums compared to 2011.
Urban dwellers pay more
In Stark County, it appeared areas in or near downtown Canton had the highest auto insurance cost well above the Ohio average with lower-than-average costs in suburban and rural areas.
The 44702 zip code in downtown Canton had a higher average auto insurance cost of $1,072 for 2018 for the 30-year-old male driver, about 152nd place of ZIP codes ranked in the state. The adjoining ZIP code 44703 in northwest Canton had a cost as high as $1,105 or 120th place.
Here are the costs and rankings for some selected ZIP codes in Stark County: 44709 (northwest Canton and Plain Township): $1,038, 186th place; 44720 (Jackson Township, North Canton and Green) $1,000 or 224th place; 44646 (Massillon and Jackson Township) $1,024, 200th place; 44632 (Lake Township and Marlboro Township) $1,019, 205th place; 44641 (Louisville and Nimishillen Township), $1,011, 213th place.
These ZIP codes were among the 1,239 Ohio zip codes for which auto insurance cost data was available.
Michigan feels the pinch
Although rates have climbed since 2011, their bite out of the American budget remains about the same. Families still spend an average of 1.5 percent of their annual household income after taxes on auto insurance, according to data from the Bureau of Labor Statistics’ Consumer Expenditure Survey.
Anything over 2 percent is considered unaffordable in minority and low-income neighborhoods, according to the U.S. Treasury Department’s Federal Insurance Office in a 2017 report.
The report found 18.6 million people living in more than 800 such neighborhoods across the United States – two-thirds of them clustered in Florida, Michigan, New Jersey, New York and Pennsylvania alone.
Michigan especially feels the pinch, with one in seven of its residents falling into this profile.
That’s because the Great Lake State has the highest car insurance premiums in the nation at an average of $2,693 per vehicle, The Zebra’s data show.
Blame its no-fault insurance law for driving up costs. The regulations, in place since 1973, require drivers to purchase unlimited, lifetime medical liability regardless of who is at fault. Eleven other states also have no-fault insurance laws, but only Michigan requires unlimited personal injury protection.
That policy will change under an insurance reform bill signed by the governor in May that could save consumers up to $1,200 annually when it takes full effect.
Meanwhile, premiums remain steep in Michigan, and even more so in Detroit – the capital of the American automotive industry – where residents pay as much as $6,282 annually to insure just one vehicle.
“It’s higher in Detroit because the cost of an average claim in Detroit is higher, and fewer people have insurance so the likelihood of you being in an accident with an uninsured driver is higher,” said state Sen. Adam Hollier, D-Detroit, who voted in support of the insurance reform bill.
An estimated one in five Michigan drivers lacks insurance, according to the national, nonprofit Insurance Research Council. Only Florida, Mississippi and New Mexico have more uninsured motorists per capita.
Hollier said he and his wife pay about $7,500 annually to insure their three vehicles, two of which are over a decade old and one of which doesn’t even have collision coverage. His best friend in a nearby suburb pays just half that to fully insure two brand-new vehicles, he said.
Within a decade, Hollier will have paid about $40,000 more than his friend on auto insurance.
“That’s a new roof, daycare, college education,” he said. “That stuff adds up really, really fast.”
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