By Anna Herod
Although age and car accident history are factors known to affect insurance rates, where one lives and parks their car may also impact their monthly bill, according to a study conducted by Value Penguin.
At $715 annually, automobile insurance in Kyle costs six percent more than the state’s average rate of $677, according to the study.
Researchers from Value Penguin conducted the study by analyzing rates with a benchmark motorist.
For the study, a 30-year-old man got estimates from multiple insurers in nearly 300 Texas cities and 314 zip codes to evaluate how much location affects insurance rates. Quotes ranged by 67 percent between Houston and Memphis, totaling in a $372 difference.
Srankie Kuo, lead analyst with Value Penguin, said the study’s purpose was to “bring attention to people” about how where one lives affects how much a person pays in car insurance. The actual cost, according to Kuo, is ultimately dependent on a person’s driver profile, the type of car a person drives and age.
By controlling the driver profile and only changing the benchmark motorist’s location, the analysts were able to see how insurance costs vary when not impacted by other factors, she said.
Rates used in the analysis were obtained from the Texas Department of Insurance data, including estimated premiums from 28 auto insurance companies licensed in Texas. The study cites premiums for coverage just above what the state requires.
The state of Texas requires drivers to get coverage for $30,000 per person and $60,000 per accident. The study obtained premium estimates for a plan that insures $50,000 per person and $100,000 per accident.
Texas officials require vehicle operators to get $25,000 of coverage for property damage while the study used coverage rates from a plan that insures $50,000 for property damage.
The cities with the highest insurance rates have greater population density and its drivers have longer average work commutes.
Researchers found that both population density and average commute time seemed to impact the estimates.
Similar logic is used by insurance providers when it comes to average commute time as well, she said. Due to the city of Kyle’s geographical location, residents often commute to San Antonio or Austin when going to work.
“Insurance companies think the longer you’re on the road, in other words, the more miles you drive on average, also increases the risk of you getting into an accident,” Kuo said. “That’s a few of the factors that would affect why one (city) would cost more than another.”
