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Impact of Address on Car Insurance Premium

Find out why where you live determines the cost of your car insurance

Your car insurance premiums are a combination of many different factors. As a general rule, if it affects the odds of you making a claim, it will impact your premiums, and the more of a difference it makes, the larger the price difference.

Location is one of the most significant factors. The state you live in, whether you’re in a rural or an urban area, what your house is like and even your specific address can all raise or lower your car insurance premiums.

This guide explains how your location is factored into the cost of car insurance, starting with price differences between states and going right down to your specific address.

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How your state impacts the cost of car insurance

The state you live in has a significant impact on the price of your car insurance. On average, car insurance is most expensive in NSW and Victoria, while the other states are all considerably cheaper. Tasmania tends to have the lowest prices overall.

  • State legislation: Mandatory CTP insurance is managed on the state level, which means costs can vary widely.
  • Competition: Areas with more competing insurance companies might have lower prices.
  • Population: A higher population means more cars on the road, more chance of having an accident and higher premiums.
  • Number of claims: The more claims originating from your state, the higher you can expect your premiums to be.

It’s probably not worth moving to another state for lower car insurance premiums, but it is worth being aware of these factors as they are also applied on a regional and local level.

How your region affects car insurance prices

Urban areas are more densely populated than rural ones, with busier roads, more car accidents overall and a generally higher likelihood of making claims of any kind. This increases premiums in cities.

However, living in rural areas means you typically need to drive longer distances on every commute, the roads can be in worse condition and you may be more likely to lose a car to bushfires or other hazards than someone living in the city.

Overall, you’re more likely to get lower premiums in rural areas. However, it all depends on where exactly you live.

Premium differences based on your address and home

Your address is used to apply very specific loadings based on location, and risk factors vary between neighbourhoods the same way they can vary between states. This is based on the odds of making a claim, and might be affected by countless factors such as how narrow or wide your road is, whether it turns onto an unusually dangerous intersection and many others.

  • Where you park: You can pay less for car insurance if you park in an enclosed garage or carport overnight, instead of on the street. Therefore, addresses without a garage have higher car insurance prices.
  • Weather. Rain, snow, fog and other bad weather can cause car accidents, so areas with frequent poor weather can have higher prices.
  • Crime. If your policy includes cover for theft, the crime rate in your neighbourhood will likely impact your premiums.
  • Population density. The more crowded your area, and the more cars on the road, the higher the prices.
  • Road maintenance. Poor road conditions are responsible for many accidents, so having better maintained roads in your area can lower premiums.

Steps to reduce these costs

The golden rule of car insurance prices is that your odds of making a claim determine your premiums. Fortunately, you don’t need to move house to reduce location-dependent loadings. Instead, try finding a policy that matches your situation and needs.

Choosing the level of cover

There are three different types of car insurance to choose from. The more at-risk your area is for certain hazards, the more important it is to get covered against it, but it will typically cost more.

  • Comprehensive. The highest level of cover available. The only policy that typically includes effective cover for weather damage, which means it may be disproportionately more expensive, but also important, in locations that are prone to extreme weather. Parking in a garage or under cover can help lower the cost of comprehensive cover.
  • Third party with fire and theft. A liability policy with cover for fire and theft. Unlike third party only policies, locations at higher risk of car theft will attract higher prices. Car security systems, such as immobilisers, alarms or VIN etching, can help you keep costs down.
  • Third party only. The most affordable type of policy. This policy generally comes with little or no cover for damage to your own car. If you live in a high-risk, high-premium location, then this policy type will be disproportionately more expensive, but may be missing the type of cover you need.

There are many other factors which affect car insurance prices besides location. It can be worth looking over them for other ways to cut your car insurance premiums. Once you’ve done that, getting low prices is largely about comparing policies side by side.

Compare comprehensive policies from Australian brands

Details Features
Comprehensive
Comprehensive
Low-cost, straightforward car insurance aimed at safe drivers.
  • Costs of towing and storage covered
  • Lifetime guarantee on all repairs, even if the car is sold
  • Emergency repairs, travel and accommodation
  • Optional zero-excess cover for windscreen and window glass
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Comprehensive
Comprehensive
Generous standard inclusions and flexible ways to save, including 15% discount for comprehensive policies purchased online.
  • New-for-old replacement if your car is a total loss within the first two years
  • Damage to your trailer up to $1,000
  • Personal effects damaged in collision, plus baby capsule or child seat, up to $500
  • Benefit from discounts for restricting policy to drivers of a certain age and over
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Gold Comprehensive
Gold Comprehensive
Flexible insurance with a variety of optional extras. Save 15% on Gold Comprehensive when you purchase online.
  • New-for-old replacement if your car is a total loss within the first two years
  • Removal of debris in the event of a collision, up to $500
  • Benefit of up to $5,000 if you die as a result of an accident while driving your car
  • Optional extras include adjustable excess and no-claim discount
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Comprehensive
Comprehensive
Save up to 10% when you buy online. T&Cs apply.
  • Cover for natural events, theft and collision
  • Damage to other people's property
  • New for old car replacement for 24 months
  • Lock and key replacement up to $1,000
  • Repairs for attached trailers and caravans up to $1,000
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Comprehensive
Comprehensive
Buy online to save 15% off your car insurance policy.
  • New-for-old replacement if your car is a total loss within the first two years
  • Cover for debris removal, emergency accommodation, and hire car after theft
  • Discounts for restricting drivers, hire car after accidents, and no-claims
  • Free 7” Android tablet with every comprehensive policy
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Comprehensive
Comprehensive
Price-beat guarantee for drivers aged 25 or older. Drive Less Pay Less discount for people who don’t use their car much.
  • Essential repairs of up to $500, or towing costs if your car is unsafe to drive
  • Cover for loss or damage while your car is in transit
  • Cover can be increased or reduced at any time if your circumstances change
  • Optional extras: roadside assistance, excess-free windscreen cover and hire car
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Price Saver (Comprehensive)
Price Saver (Comprehensive)
Save 15% when purchasing online, plus eligible customers receive 10,000 Velocity Frequent Flyer points.
  • New-for-old replacement if your car is a total loss within the first two years
  • Receive an alert by SMS if hail is predicted
  • Personal effects up to $500 after collison and theft
  • Optional 24/7 roadside assistance
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Comprehensive
Comprehensive
Generous inclusions and flexible options for tailored comprehensive insurance, including 24/7 roadside assistance.
  • Emergency fuel, replacement of flat tyre and battery service included
  • Modifications such as personalised plates, towbar and tinting covered
  • Up to $1,500 to cover the cost of counselling sessions after a claim
  • Cover for work equipment carried inside vehicle and contents of caravan
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Comprehensive - Elegant Cover
Comprehensive - Elegant Cover
Comprehensive cover with affordable pricing. Save up to 20% when you buy AI car insurance online.
  • Personal effects damaged in a collision up to $500, plus extra for child seat
  • Opportunity to get cover for modifications and accessories
  • Loss or damage while your car is in transit
  • Option of full reimbursement for replacing windscreen and window glass
Get Quote More info
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Andrew Munro

Andrew writes for finder.com.au, comparing products, writing guides, sniffing out deals and looking for new ways to help people get the most out of their money.

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