Two major factors drive up car insurance costs in Philadelphia. The Insurance Information Institute points out that underwriting -- the process of pricing insurance policies -- is partly based on neighborhood crime rates. Data available from CityRating show that overall property crime in Philadelphia, including car theft, is nearly twice the national average. (Every ZIP code in Philadelphia is mapped out with comparable car insurance rates below.)
The second factor is the high number of uninsured drivers in the city. At least 27 percent of traffic accidents reported to police in 2012 involved uninsured drivers, despite Pennsylvania's mandatory insurance laws.
Philadelphians pay some of the highest auto insurance rates in the United States, and tops for Pennsylvania. Right now a policy in the City of Brotherly Love costs triple what the same coverage does in other parts of the state. But whatever part of Philadelphia you call home, you should comparison shop for insurance. Every car insurance company does its own math, and the difference between them could be measured in hundreds of dollars a year -- and in Philly, maybe thousands.
Our Pennsylvania car insurance profile page sketches out the insurance scene for Pennsylvania drivers.
Researchers Eric Smith and Randall Wright, writing in the American Economic Review, point out that underwriting criteria and Philadelphia residents' demographics combine to keep auto insurance rates high. Insurance actuaries use consumer credit ratings and education and income levels to help decide premiums. Low-income drivers living in high-density neighborhoods pay more for their auto insurance. According to a recent Census, just 18 percent of Philadelphia residents have college degrees and only 56 percent are employed.
Philadelphia car insurance requirements
|Pennsylvania state law requires the following minimum car insurance coverage:|
|Minimum bodily injury liability||$15,000/$30,000|
|Minimum property damage liability||$5,000|
|First party benefits (medical)||$5,000|