Amidst struggling with traffic congestion, timing excursions based on parking meters, and moving your vehicle to avoid Alternate Side Parking tickets, owning a car in the city can be a strenuous necessity. To add insult to injury, you’re likely paying substantially higher auto insurance premiums as well.
There are three primary factors that auto insurers use to calculate premiums.
The first is an assessment of who you are as an individual—your age, gender and marital status. Middle-aged drivers are viewed as lower risk due to their experience. Women generally pay lower rates because males are more likely to be involved in an accident. Single drivers, compared to their married counterparts, are also a higher risk due to the statistically higher likelihood of being involved in a crash.
The second factor that goes into the calculation of your premiums is your driving history. Put simply, if you have a history of accidents and violations, you’ll end up paying for it.
But the third factor has little to do with who you are as an individual: where you live. Insurers view the perils of urban living (higher likelihood of crashes, break-ins and motor vehicle theft) as a much greater risk than those faced by individuals living in rural or suburban environments.
In fact, a close link exists between the most dangerous cities and those with the highest insurance premiums. To what extent will you be paying for your geography? According to 2016 research from NerdWallet, rates are 47 percent higher in the 20 most dangerous cities compared to the 20 safest ones.
What are the criteria that determine a city’s danger level? One is the rate of auto accidents. Insurers also look at the rate of fatalities per 100,000 crashes, as well as the risk of motor vehicle break-ins and thefts. In addition, population density is a factor; with more people comes greater risk in the eyes of insurers.
Even local weather patterns, which can alter the likelihood of an accident, are taken into account. Road maintenance can also increase the chances of a crash. Furthermore, state laws and commute lengths can drastically affect how insurance companies calculate premiums.
With that said, here are the top five most expensive cities to insure a car:
1. Detroit: According to NerdWallet’s research, drivers in Detroit are shelling out nearly $11,000 annually for their car insurance premiums—easily the highest in the country. Despite the fact that Detroit is at the center of the country’s car manufacturing industry, some of Detroit’s citizens would rather take one off the streets than off the assembly line. This city has received poor marks for the rate of break-ins and stolen cars. Add in the state’s no-fault insurance system, the nation’s second-highest rate of fatal accidents—at 16.2 per 100,000—and you end up with stratospheric premiums.
2. New Orleans: With 12.5 fatal accidents per 100,000 and low grades for larceny and break-ins, New Orleans drivers pay the price to the tune of $4,309 a year. A couple other factors drive up premiums for New Orleans drivers: longer commutes and poorly maintained roads. A Louisiana state law also allows drivers to directly sue insurance companies, which leads insurers to pad the price of insurance to protect themselves.
3. Grand Rapids, Michigan: Like Detroit, Grand Rapids drivers are also covered under the no-fault insurance laws that require insurance companies to pay medical expenses. Wintery weather has lead to high levels of road deterioration that presents a greater risk to Grand Rapids drivers, leading to an annual premium cost of $4,042.
4. Newark, New Jersey: Although Newark is 15 miles away from Manhattan, drivers in the Brick City are still paying the price. Insurers assume many drivers commute to the densely populated Big Apple. Factor in New Jersey’s no-fault insurance laws and icy winters and what you end up with is an annual premium of $3,525.
5. Baton Rouge, Louisiana: While smaller than Detroit, Baton Rouge has a slightly higher rate of fatal accidents, at 16.6 per 100,000. Break-ins are highly problematic in this city, but the risk of having your car stolen is slightly lower. Add in longer-than-average commutes, traffic congestion and poorly maintained roads and Baton Rouge drivers end up paying an average of $3,363 each year to insure their vehicles.
While it may not be advisable to move across state lines just to reduce your premiums, if you’re living in a high-cost city, you can save yourself some money by shopping around for rates, driving safely and limiting miles driven by taking advantage of public transportation whenever possible.