Mileage, Location Key Factors in Determining Auto Insurance Rates

Mileage, Location Key Factors in Determining Auto Insurance Rates

A study commissioned by found that your state of residency is a significant factor in setting your auto insurance premiums.

“Location, location, location” is a well-worn mantra from the real estate business. But it applies to automotive insurance as well.

A study commissioned by found that your state of residency is a significant factor in setting your auto insurance premium.

“When determining rates, auto insurers typically use mileage as a major factor,” said Laura Adams, senior insurance analyst at insuranceQuotes. “But the amount varies considerably depending on where you live. Consumers who live in states with the biggest hikes have more opportunity to save by driving less. In California, increasing your mileage from 5,000 to 20,000 causes a premium increase over 25 percent.”

Nationwide, drivers who increase their annual miles from 5,000 to 20,000 see an average rate increase of 9 percent, the study found.

The top five states where drivers see the highest rate increase when annual mileage increases from 5,000 to 20,000 miles are

  1. California – 25.66 percent
  2. Alabama – 9.79 percent
  3. Virginia – 9.21 percent
  4. Massachusetts – 9.13 percent
  5. Washington, D.C. – 9.07 percent

Meanwhile, the top five states where drivers see the lowest rate increases are:

  1. North Carolina – 0 percent
  2. Rhode Island – 1.07 percent
  3. Georgia – 2.53 percent
  4. Texas – 2.82 percent
  5. Oregon – 3.06 percent

“When your driving habits change for any reason – such as working from home, having a different commute or retiring, let your insurer know,” Adams said. “Regardless of the financial impact, drivers should always be honest about their mileage, otherwise you risk having a claim denied.”

The full report, which includes state-by-state data as well as analysis and saving tips, is available at

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