A change in territory normally means that you have changed your geographical location by means of now having a different zip code or address. The Rhode Island Insurance Division defines a territory as the place where you garage your automobile and, therefore, do most of your driving. This state finds that your territory is important in the rating process.

There is no correlation between a territory number being higher and lower and the value of rates. Simply, it is a random number assigned to a territory, or to take it further usually a company like ISO has an assignment that many insurance companies adopt.

In most states an insurance company can rate on many factors, including your location since some areas have higher risks than other areas.Experience shows that more losses and accidents happen in urban areas than in rural ones. There are many reasons for this: more cars and drivers per square mile create a condition where more collisions take place. At the same time there is a higher incidence of theft and vandalism, as well as other crimes such as drunk driving, hit and run, and arson.

So a rural area with not a lot of traffic would typically be cheaper for auto insurance than a big city with statistically more risk for you to be in an accident, have your car stolen and in general have more claims against your insurance policy.

Many states do allow an insurance company to rate using as one of the rating factors your zip code or territory. For example the Division of Insurance for Massachusetts states that the amount that you pay for car insurance will depend on your individual risk factors, such as your driving record, the territory in which you live, and other rating factors approved by the Commissioner.

In California however auto insurance carriers are no longer allowed to use a motorist's zip code as a major rating factor. Though Proposition 103 passed many years ago it took regulations issued by the Insurance Commissioner in 2006 to make it so that CA auto insurance carriers complied with these rules regarding zip codes and rating systems. In August of 2006, companies were given two years to phase in the new safety record-based system.

Before Prop 103 was enforced drivers in certain neighborhoods paid dramatically more than people living just across the ZIP Code line, because of insurers' reliance on geography in their rating systems. Under the old system good drivers could pay more than other customers who caused accidents, because of ZIP Code.

Now in California the annual miles a person drives and the number of years they have been licensed must each have a greater impact on insurance premiums than ZIP Code or such other factors as marital status, which has historically had a major impact on premiums. A person's geographic location can still factor in with car insurance premiums, but not nearly to the extent they formerly were.

So it will depend upon state laws as well as insurance company's guidelines and rating system on how much as change in territory (zip code or geographical location) will affect your auto insurance premium.

Your insurance agent should be able to tell you about your company's rating system with regards to your change in location or territory. You can contact your state's insurance regulator for information on state laws and also to find out about your company's rating system since rates must be filed with this state agency.