The Effects of ZIP Code Changes on Insurance Premiums

You’re likely aware that insurance carriers must consider many aspects of policyholders’ circumstances when calculating rates. Whether you’re an individual renting an apartment, a homeowner and head of your household or business owner, insurers are likely to thoroughly analyze your unique situation before offering coverage. Your location, including your ZIP code, may be a particularly prevalent factor that may impact premiums for several types of insurance.

How Can Moving to a New ZIP Code Affect My Rates?

In short, your location is among the most important criteria during the quoting process for many forms of coverage. ZIP codes help insurers classify certain areas and gauge related risk levels. Certain perils, such as natural disasters and crime, may be far more concerning, even if you move just a single ZIP code over from your previous location. Conversely, moving to an area considered to be lower risk could help you save on your premiums upon renewal.

Which Types of Policies May Be Affected By ZIP Codes?

The cost of many types of insurance may be affected by your location. Consider the following examples of how your ZIP code might impact premiums for the following types of insurance:

• Homeowners insurance—If you purchase a home in an area with high burglary rates, you may have to pay more for coverage compared with homeowners who live in an area considered safer.
• Auto insurance—Whether you’re an individual or business, moving to a ZIP code with higher traffic rates may impose more expensive premiums, as this can generally indicate a greater risk of accidents.
• Health insurance—Living in an area with a lower cost of living and potentially more affordable health care may help you enjoy lower premiums, as insurers factor in potentially reduced claims costs.
• Umbrella insurance—Having excess liability coverage may be a good idea, but if you move your family or business to an area with higher risk levels, such as due to greater population density or busier roads, you may have to pay more for coverage.

We’re Here to Help

Contact Primero Insurance in New Braunfels, TX, today to find ideal coverage in your ZIP code.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.