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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
  • Lifetime guarantee on all repairs
  • Emergency repairs, travel and accommodation
  • Optional zero-excess cover for windscreen and window glass
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Comprehensive
Comprehensive
15% discount for comprehensive policies purchased online
  • New-for-old replacement
  • Trailer damage up to $1,000
  • Up to $500 for personal effects damaged in collision
  • Discounts for restricting policy to drivers of a certain age and over
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Comprehensive
Comprehensive
Buy online and save up to 10%. Price-beat guarantee for drivers aged over 25
  • Essential repairs and towing costs up to $500
  • 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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Comprehensive
Comprehensive
24/7 roadside assistance included in your comprehensive policy
  • Emergency fuel, replacement of flat tyre and battery service
  • Modifications like personalised plates, towbar and tinting covered
  • $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
Comprehensive
Save up to 10% when you buy online (T&Cs apply). Pay by the month at no extra cost.
  • Cover for accidents, fire, storms, theft, and damage to car
  • New car replacement in first 24 months
  • Guarantee on repairs for approved repairers
  • Up to $1000 lock and key replacement cover
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Price Saver (Comprehensive)
Price Saver (Comprehensive)
Save 15% when purchasing online. Eligible customers can receive 5,000 Velocity Frequent Flyer points before 31 December 2017
  • New-for-old replacement
  • Receive an alert by SMS if hail is predicted
  • Personal effects up to $500 after collision and theft
  • Optional 24/7 roadside assistance
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Comprehensive
Comprehensive
Premium product, without the premium price
  • Up to $20m in legal liability cover, plus protection for your car
  • Discount options for low km’s driven
  • New for old car replacement
  • No fees for monthly payments of policy cancellations
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Comprehensive
Comprehensive
Buy online and save up to 10% on your policy
  • $25,000 cover for accidental death
  • $500 cover for emergency repairs
  • Cover for legal costs
  • Temporary cover on replacement vehicle - 14 days
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Comprehensive - Elegant Cover
Comprehensive - Elegant Cover
Save up to 20% when you buy online
  • Up to $500 for personal effects damaged in a collision
  • Cover for modifications and accessories
  • Loss or damage while your car is in transit
  • Option of full reimbursement for replacing windscreen and window glass
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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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