How Living In A Wealthy Suburb Increases Your Car Insurance Rates

2 Sep

ImageSurprised? I was too. When we downsized from a Nouveau Riche suburb of McMansions with meticulously landscaped Chemlawns to an Inner-Ring Suburb with a Frontporch Culture of modest homes and mature trees, our car insurance rates actually went down by a couple hundred dollars a year.

After I got over my initial shock, I called my insurance agent to make sure it was not a misprint. Although many factors influence car insurance rates, I found out the main culprit is that people in affluent neighborhoods simply file more insurance claims, thus driving up prices for everyone in the area. The other main reason is that no matter where the incident takes place, both the site and the residence become part of the statistics. Below are some other common reasons for the increase:

Affluent ZIP Codes

  • More expensive cars; more expensive to fix
  • Multiple cars
  • Kids drive & often given a car; all the reckless inexperienced behavior & bad judgment that goes with that
  • NIMBY; translating into longer commutes to workplace
  • Shopping malls; whether it’s actually crime or a Lexus getting into a fender bender with a Jaguar in the parking lot
  • Chauffeuring children; rather than using school or public transportation

Modest ZIP Codes

  • Less expensive cars; less to repair
  • File less claims; usually know someone who can fix it, or not a priority to fix
  • Better access to public transportation especially to city jobs; avoids accidents, tickets & break-ins
  • Walkable neighborhoods & bicycle friendly; access to stores, parks, schools, church, etc

If you’re making at least six-figure, you’re not reading this blog anyway so you don’t care that you are filling the coffers of the insurance industry because they’re probably in your financial portfolio, but if you are a hard working middle class American who is fiscally prudent these are definitely points for you to consider.

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