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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.
  • Up to $20 million in liability cover
  • Optional windscreen and window glass only cover
  • Optional car hire replacement cover
  • Fast, simple online claims process
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Comprehensive
Comprehensive
15% discount for comprehensive policies purchased online.
  • Lifetime Guarantee on all authorised car repairs as long as you own the car.
  • Flexible payment options
  • 24/7 phone & online claims service
  • Up to $1,000 key replacement and lock re-code
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Gold Comprehensive
Gold Comprehensive
Save 15% on Gold Comprehensive when you purchase online. Optional 24/7 roadside assistance with unlimited callouts.
  • New for old replacement for the earlier of 2 years/40,000kms
  • $850 ($100/day) emergency transport and accommodation
  • Cover for replacement of keys up to $1,000
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Comprehensive
Comprehensive
Buy online to save 15% off your car insurance policy and receive a free 7" Android tablet.
  • New for old replacement for the earlier of 2 years/40,000kms
  • Online discount of 25%
  • $850 ($100/day) emergency transport and accommodation
  • $1,000 cover for hire vehicle following theft (max 14 days)
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Comprehensive
Comprehensive
Price beat guarantee for comparable comprehensive policies for drivers aged 25 or older.
  • New for old replacement of your car - 24 months
  • Choice of agreed value of car
  • Third party property damage
  • Theft and malicious damage cover
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Comprehensive
Comprehensive
Benefit from new for old car replacement, cover for fire and theft, plus more.
  • Option for Drive Less Pay Less policy
  • Up to $20 million in legal liability cover
  • New for old car replacement
  • Each policy makes your car carbon neutral
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Price Saver (Comprehensive)
Price Saver (Comprehensive)
Up to 15% discount for comprehensive policies purchased online.
  • Repairs with authorised dealers guaranteed
  • New for old replacement for the earlier of 2 years/40,000kms
  • No Fault Accident, no excess
  • Hail SMS alerts
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Comprehensive
Comprehensive
24/7 roadside assistance and up to $20 million in liability cover.
  • 24/7 roadside assistance
  • Comprehensive cover for accidental damage
  • Optional hire car provision up to 14 days
  • $20 million legal liability cover
Get Quote More info
Comprehensive - Elegant Cover
Comprehensive - Elegant Cover
Save up to 20% when you buy AI car insurance online. Comprehensive cover with affordable pricing for modest vehicles, especially families.
  • New car replacement - 12 months or 20,000 km
  • Accidental damage to own and third party vehicle or property
  • Theft and/or attempted theft
  • Up to $20 million legal liability
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Picture: Shutterstock

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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