When pricing auto insurance, you know that the premium you pay is based on a number of different factors, including your driving history, the type of vehicle that you own, and your age.

Other criteria that you may not be aware of are also factored in, including the area in which you live. This category encompasses whether or not your area is prone to natural disasters and theft, as well as the overall economic climate of the area and how many miles, on average, the residents commute to their jobs.

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What Factors Into Geographic Location

Natural Disasters

One way that geographic area can increase your auto insurance premium rate is if your location is prone to natural disasters. For example, due to the many hurricanes, including Katrina, in the state of Louisiana, auto insurance premiums in that state are among the highest in the nation.

Likewise, Oklahoma has been hit over the past several years with numerous tornados that have caused property damage, including damage to vehicles. Therefore, Oklahoma also has some of the higher auto insurance premiums in the United States.

History of Claims

An area's past history of auto insurance claims can influence the premiums that are charged to current auto insurance policy holders. When claims are on the rise and insurers are required to pay out, they need to fill the gap somehow—and typically this is through charging higher premiums to its current policyholders.

Theft/High Crime Rate

Areas that are known for having a higher rate of crime or theft will also increase auto insurance policy premiums. Typically, those who live in larger cities are more at risk for crime or theft than those who reside in smaller rural towns.

Traffic Density

Traffic density can influence auto insurance rates. For instance, the state of Maine is ranked as having a very slow rural pace, which, in turn, keeps auto insurance rates down. There is typically no morning or afternoon rush hour gridlock, like is seen in many metropolitan areas like New York City. Because of this, there are also fewer accidents—and therefore, fewer insurance claims.

Carrier Competition

Another reason that rates are higher or lower in a given area actually has nothing to do with conditions in the area or with the drivers themselves, but rather the amount of carrier competition. In other words, the more insurance carriers competing for business in a particular area, the lower auto insurance rates are likely to be.

Some states, such as Ohio, Illinois, and Texas, have more than 650 insurers that are competing for business. This competition, along with the way that insurers are regulated in certain states, tends to keep premiums both stable and affordable for consumers.

Where to Go to Keep Your Auto Insurance Premium Low

If you want to keep your auto insurance premium low, there are several areas of the country known for having the best rates. First, due primarily to its low density of traffic, along with its low crime rate and low rate of natural disasters, Falmouth, Maine comes in with the very lowest car insurance rates in the United States.

Due to its mild temperatures and moderate traffic patterns, there are several cities in North Carolina that are also well known for having lower auto insurance rates. These include Winston-Salem, Greensboro, Raleigh, Durham, Charlotte, and Fayetteville.

According to a study that was conducted for Insure.com, given all of the factors discussed above, other states where consumers pay low rates for auto insurance include:

The Bottom Line

When shopping for car insurance, remember that many factors influence the amount of premium that you will pay. While some of these criteria are in your control, such as your driving record and the type of vehicle that you own, many others are not.

To find the best rate possible, it may be necessary to shop several different carriers in order to locate the policy and the premium that work with your particular situation, budget, and coverage needs. Here's some tips on how to cancel or change your policy.