Prepare for premium changes
Whether you’re moving just down the street or across the country, there’s a high probability that your auto and homeowners insurance will be affected. Make sure to research pricing when considering different neighborhoods to move into, as the smallest change in environment can drastically impact your premiums. Below are some of the factors that affect auto and homeowners insurance rates in different locations.
Your auto insurance rates are directly impacted by the risks associated with the location you live in. Living in a neighborhood that your insurance company considers “high-risk” can result in higher premiums. A neighborhood’s risk level is determined by population density, number of car accidents, traffic, crime rates, severe weather events, frequency and cost of claims, and more.
Moving to a big city usually results in higher auto insurance premiums due to higher rates of vehicle theft and vandalism and increased traffic. However, moving to a more rural location can translate to increased premiums if there are more deer in the area, frequent tornadoes, or if your daily commute is longer (the more you drive each day, the higher your chances of getting into an accident).
All risks considered, the states with the highest average auto insurance premiums are Louisiana, Michigan, and Florida. The least expensive states for auto insurance are North Dakota, Maine, and Iowa. Disclosure 1 Regardless of where you move, remember to inform your insurance carrier as soon as possible in order to avoid billing issues or denied claims. If you’re moving out of state, you’ll need a whole new policy, so it’s best to give your agent a call ahead of time.
Similarly to auto insurance, there are numerous factors that determine whether or not the location of your new home is considered “high-risk.”
Age of home
- Older homes have older wiring systems, which increases your risk of an electrical fire.
- An older home could have an outdated plumbing system that could lead to costly plumbing mishaps.
- Older neighborhoods have older sewer systems, which increases your risk of a sewer backup.
- Since there are increased risks to buying an older home in an older neighborhood, your homeowners insurance premium could potentially increase as well.
- Look for houses located within five miles of a fire station, as their close proximity to fire rescue tends to result in more favorable rates.
- If the small, rural town you’re moving to is serviced by volunteer firefighters, you’ll most likely see an increase in premiums.
- On the other hand, living in a big city with high crime rates and an increased risk of burglaries usually means increased rates as well, regardless of how close you are to a fire station. Disclosure 2
- Severe weather events such as tornadoes, wildfires, hurricanes, and hail storms make areas prone to such disasters high-risk.
- While living along the water is a delightful option, insurance rates for coastal properties have been steadily rising over the last several years due to increased hurricane activity.
- The states with the lowest average homeowner’s premiums are Idaho, Utah, and Oregon. The states with highest average homeowners rates are Louisiana, Florida, and Texas. Disclosure 3
- While Florida, Texas, and Louisiana are well-known for devastating hurricane activity, Texas and Louisiana are also ranked in the top ten states with the most tornadoes each year. Disclosure 4
- To avoid higher rates, try to avoid high-risk areas.
Talk to your broker
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© 2021 McGriff Insurance Services, Inc. All rights reserved. McGriff Insurance Services, Inc. is a subsidiary of Truist Insurance Holdings, Inc. The information, analyses, opinions and/or recommendations contained herein relating to the impact or the potential impact of coronavirus/COVID-19 on insurance coverage or any insurance policy is not a legal opinion, warranty or guarantee, and should not be relied upon as such. This communication is intended for informational use only. Given the on-going and constantly changing situation with respect to the coronavirus/COVID-19 pandemic, this communication does not necessarily reflect the latest information regarding recently-enacted, pending or proposed legislation or guidance that could override, alter or otherwise affect existing insurance coverage.
This communication is intended for informational use only. As insurance agents or brokers, we do not have the authority to render legal advice or to make coverage decisions, and you should submit all claims to your insurance carrier for evaluation. At your discretion, please consult with an attorney at your own expense for specific advice in this regard.
Insurance Information Institute, “Top 10 Most Expensive And Least Expensive States For Automobile Insurance, 2017,” https://www.iii.org/table-archive/20997 accessed March 2, 2021.
Coverage, “How Does My Location Affect My Home Insurance,” https://www.coverage.com/insurance/home/how-does-my-location-affect-my-home-insurance/, accessed March 2, 2021.
Insurance Information Institute, “Facts + Statistics: Homeowners and renters insurance,” https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance, accessed March 2, 2021.
Insurance Information Institute, “Facts + Statistics: Tornadoes and thunderstorms,” https://www.iii.org/fact-statistic/facts-statistics-tornadoes-and-thunderstorms, accessed March 2, 2021.
Insurance products and services offered through McGriff Insurance Services, LLC, a subsidiary of Truist Insurance Holdings, Inc., are not a deposit, not FDIC insured, not guaranteed by a bank, not insured by any federal government agency and may go down in value.
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