Drivers in big cities tend to pay higher car insurance prices than drivers in smaller cities. Big cities tend to have higher crime rates, more traffic, and more claims. It’s simple math.
These high insurance prices lead some drivers to ask a question: can I continue using a different address after I move? If I move to the big city from a small town, can I continue using my previous address to get lower insurance rates? If I move out of my parents’ house and into the big city, can I continue using their address to lock in a lower rate? Can I use my old address in another state to avoid paying higher insurance prices in my new state?
Today, we’re answering all your questions about how moving affects the price of car insurance.
You Must Tell Your Insurance Company Where Your Vehicle is Parked at Night
First and most importantly, let’s clear something up: when your insurance company is asking for your address, they want to know where your car is parked at night.
If you lie to your insurance company and claim that you live in a small town when you really live in a big city, then you may be committing insurance fraud. It’s illegal to claim you live at one address while actually living at another.
Your ZIP code plays a role in insurance premiums. Different ZIP codes have different accident rates. Some ZIP codes have higher rates of vehicle theft and vehicle break-ins. Some ZIP codes – like crowded ZIP codes in the middle of big cities – have higher accident rates. Your insurance company uses all of this information when calculating car insurance prices – which is why it’s important you tell the truth on your car insurance.
Typically, moving to different cities within the same state won’t have a huge effect on car insurance premiums. However, moving to a different state can significantly affect your insurance premiums.
What Happens If You Lie About your Vehicle’s Location?
When you apply for car insurance, your car insurance company will ask for an address. You give them the address, then they give you car insurance based on the ZIP code stated in that address.
Your car insurance company won’t check to make sure your vehicle is parked at that address most nights.
However, if you ever need to make a claim, and your car insurance company discovers that you lied about your vehicle’s location, then your claim may be denied.
Let’s say your car is broken into on the street outside your home in the downtown area of a big city. Your car needs extensive repairs. Your car insurance company investigates the claim to verify everything is correct. However, they find that you have listed your address as a separate location in a small town to get lower insurance prices. You might have listed the address of your parents’ house or your girlfriend’s house, for example, in order to lock in a lower rate. If your insurance company discovers you have lied about the location of your vehicle, then your claim could be denied.
Auto insurance companies have divisions called Special Investigative Units. These divisions, aided by law enforcement, will verify all of the information surrounding your claim. This is a crucial part of reducing insurance fraud. If it’s discovered that you lied about your address to get lower rates, then your car insurance claim could be denied or reduced.
Contact your Car Insurance Company to Ensure Your Address Information is Accurate
Lying about your address may seem like a minor mistake. However, it’s a small mistake with big consequences.
Contact your insurance company today to explain your change of address. You don’t want to pay for a car insurance policy that you can’t use. If your car insurance policy lists an incorrect address, then you may not be able to make a claim. The sooner you contact your insurer, the sooner you can limit your liability.
Typically, Moving Won’t Have a Huge Effect on Car Insurance Premiums
Insurance companies take dozens of factors into account when calculating car insurance premiums. Your ZIP code is just one factor of many.
In most cases, moving to a new address in the same geographic area won’t have an enormous effect on car insurance prices, which is why you have little to lose by updating your current address with your car insurance company.
If you’re moving between states, however, car insurance prices can change substantially. Regardless of where you’re moving, however, it’s in your best interest to tell your car insurance company your current address.
Insurance companies lose billions of dollars to fraud every year. Some of this fraud is major: you might ask your friend to steal your car when you leave it unlocked in front of your house. Other fraud seems minor – you might list your parents’ small-town address as your home address when you’re actually living in a big city, allowing you to save $200 per year on car insurance premiums. Unfortunately, both of these situations are examples of insurance fraud that could cause your claim to be denied.
Your insurance company needs to know where your car is parked most nights of the week. The ZIP code where your car is parked at night plays a crucial role in determining your car insurance premiums. If you lie about this location in an attempt to get a cheaper rate on car insurance, then your claim may be denied.