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Originally Posted by Chad11491
They must charge more for more heavily populated areas.
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No. Population density has nothing to do with it. Claims drive the rate differences. If you live in an area that has higher claims, you will pay more. If you live in an area that has lower claims, you will pay less.
A perfect example is New York City. If you live in Queens or Brooklyn, your rates will be considerably higher than if you live in Manhattan, even though Manhattan is more heavily populated. Why? Because people who live in Manhattan and have cars don't actually drive them as much as people who live in the outer boroughs, and therefore they get into fewer accidents. The insurance companies have to pay more in claims in the outer boroughs, so they charge you more if you live there.
When I moved from Tennessee to Louisiana, my insurance doubled. The reason for that is that the average claim in Louisiana is higher than in other states. It costs more for the insurance companies to do business here, so they pass that cost along to the consumer.
I would expect Los Angeles to have high rates because of the car culture there, where most people drive longer distances on a daily basis than in other cities. More driving leads to more accidents leads to higher claims.
Quote:
Originally Posted by Veloist
No one ever mentions their assets, which is why insurance rates will differ.
If you own a house, property, or other land, you'll be paying more.
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LOL. Owning real property does not increase your auto rates. Where do people come up with this stuff?