Curious why car insurance rates often increase from year to year? For example, why do you pay more for car insurance than a friend in another ZIP code?
The premiums charged by your insurance company are based on different criteria, such as your driving history, vehicle year/make/model and age. The city you live in can also impact how much you will pay for car insurance.
Keep reading to compare car insurance rates by ZIP code and which cities are the most expensive.
Average car insurance rates by ZIP code
Recently, CarInsurance.com collected automobile insurance premium data from every state and significant ZIP code in the country. Our analysis shows which cities/ZIP codes have the costliest car insurance rates and the least expensive automobile insurance rates, on average.
Living in a more rural ZIP code area can yield cheaper car insurance premiums than large metropolitan ZIP codes. Keep reading to learn which cities are more or less expensive for car insurance.
- State Minimum: $511
- 50/100/50 Liability Only: $637
- Full Coverage 100/300/100: $1,682
Most expensive car insurance rates by ZIP code
Below are the cities (based on ZIP codes) with the highest car insurance rates, according to 2022 data.
Other ZIP codes with pricey car insurance rates include Chicago ($2,919), Baltimore ($2,918) Lookout, Kentucky ($2,890), Newark, New Jersey ($2,807) and Providence, Rhode Island ($2,726). Remember, these are average rates across these ZIP codes within these states.
Which cities have the highest car insurance cost?
However, taking a closer look unveils the highest actual premium prices policyholders in many of the ZIP codes may end up paying (on a low-to-high range, not averaged out), although they will pay less on average for a policy in these cities:
- Detroit, Mich.: $16,397
- New York, NY: $13,850
- St. Louis, Mo.: $10,332
- Chicago, Ill.: $10,121
- Wilmington, Del.: $7,679
Geoff Cudd, a Philadelphia-based consumer advocate and owner of FindTheBestCarPrice.com, says many factors play into why car insurance rates vary so greatly from location to location.
“Among them are social factors like population density, how many people are on the road, how high the theft rate is, and how many accidents occur in that state. There are also environmental factors like what road conditions are like in that state and how bad the weather is,” Cudd says.
Mark Friedlander, director of corporate communications for the Insurance Information Institute in St. Johns, Florida, explains that your ZIP code can significantly affect your out-of-pocket insurance costs.
“You could reside in a large city like Chicago or Los Angeles and pay significantly different rates based on what ZIP code you live in within that city,” he says.
Cheapest car insurance rates by ZIP code
On the other hand, there are plenty of areas in the U.S. where you will fork over much less for car insurance. See the table below for the cheapest car insurance rates by ZIP code and city, state and annual car insurance cost.
Five additional ZIP codes that boast lower rates are Ketchikan, Alaska ($1,150); Walnut Bottom, Pa. ($1,150); Anahola, Hawaii ($1,158); Howard, Wis. ($1,159); and Swanzey, New Hampshire ($1,161).
Which cities and ZIP codes have the cheapest car insurance?
Want to know where you can get the cheapest car insurance? Here are a few:
- Corning, NY: $488
- Northfield, Mass.: $495
- Put In Bay, Ohio: $523
- Lebanon, Ind.: $583
- Boise City, Idaho: $642
See the table below for the cheapest ZIP codes for car insurance in the U.S.
Why does car insurance cost vary by ZIP code?
Friedlander points to a simple fact: The city you live in often significantly affects car insurance premiums.
“Metro-area drivers pay much more for auto insurance than drivers in rural locations in the same state,” he says. “For example, drivers in the Chicago area pay much more for auto insurance compared to downstate Illinois cities.”
Additionally, ZIP codes with single-digit uninsured motorist rates “have lower average rates than those with uninsured motorist rates above 20%,” Friedlander says.
Drivers in ZIP codes with lower populations and accident rates will be charged less than motorists in cities with higher traffic volumes, accident frequencies and severity, vandalism, theft, crime rates and insurance payouts.
“Inflation is also contributing to higher auto premiums,” Friedlander says. “According to an analysis from the Insurance Information Institute, what we are now seeing are double-digit year-over-year increases in repair costs, driven by supply chain shortages of replacement parts and higher labor costs. Parts and equipment are up 12.6% year-over-year.”
Moreover, the cost of vehicles plays a huge role in the pricing equation for insurance. Friedlander says new vehicle prices are up 12.2% yearly, while used vehicle prices have increased by 40.5%.
Final thoughts: Car insurance rates by ZIP code
Car insurance companies assess many factors when setting rates, and your ZIP code is one of them — based on the number, severity or cost of car insurance claims, insurers assign different risk levels.
To estimate car insurance costs, input your coverage needs and location into our estimator tool.
Resources & Methodology
Insurance Information Institute. “Facts + Statistics: Uninsured motorists.” Accessed June 2022.
CarInsurance.com commissioned Quadrant Information Services in 2022 for auto insurance rates for a 40-year-old male driver with a good insurance score (no violations) and a 12-mile commute with a full-coverage policy. The data includes auto coverage by ZIP code for 2022 and data from 2019 and 2022 vehicle data.
– Michelle Megna contributed to this story.