S.C. Residents Could Be Paying 90% More for Auto Insurance because of Where They Live
- On average, there was a $283 price difference between the cheapest area and the most expensive area.
- The area that had the lowest quotes was Oconee. Its average quote was 10% below the statewide average.
- The areas that had the highest quotes were Colleton and Hampton. Their average quotes were 7.6% above the statewide average.
Think where you live in South Carolina isn’t affecting how much you pay for car insurance? Think again. You could be paying as much as 90% more for car insurance just because of where you live, according to an analysis of sample quotes from the South Carolina Department of Insurance (DOI).
Our location affects all of our auto insurance rates to some degree. To understand just how much of an effect it can have, we analyzed 920 sample quotes from the DOI that were broken down among 46 territories spread throughout the state. Twenty insurers were included in the analysis, and all quotes were for a 34-year-old single male. Once we compiled the data, we looked at the pricing differences between the territories.
The results showed a single insurance company, on average, charged nearly $300 more if the driver lived in the most expensive territory compared with the cheapest territory.
What parts of South Carolina are likely to see the highest rates? According to the data, Hampton and Colleton. The 20 insurers most frequently gave the highest prices to these two territories. Six of the 20 insurers gave the highest rate to Hampton, and six insurers gave the highest rate to Colleton.
The territory that most frequently saw the lowest rates was Oconee. Oconee saw the lowest rates available at five of the 20 insurers.
|Territories with the cheapest and most expensive S.C. auto insurance rates|
|*Quotes are for a 34-year-old single male with a good driving record insuring a Toyota Taurus.|
Territorial rating explained
Why does where you live affect your auto insurance bill? Because of something called “territorial rating.” Territorial rating is when insurers use your location to help determine the price you should pay for a policy.
Where you live is only one factor insurers look at to help determine your price. They also look at your driving history, your age, the type of car you drive, and a whole host of other factors. The reason insurers look at all of this information is to get a better idea of how likely you are to file expensive claims in the future. With territorial rating, they do so by analyzing how often people in your geographic area tend to file claims. If you move to a city with drivers that file a high amount of claims, you can expect to feel that in your auto insurance bill. On the other hand, you're likely to see savings if you move from an area with a higher amount of claims to one with a lower amount of claims.
All insurance companies base these trends off their own claims data. As a result, their territorial pricing practices will differ. That means the priciest territory at one insurer isn’t necessarily the priciest at another insurer. That’s just one more reason for drivers to shop around before buying a policy.
Data shows territorial price difference ranges from $87 to $584
So how much could location actually affect your bill?
By up to $283, on average. In our analysis, that was the average difference between the quote for the cheapest territory and the quote for the most expensive territory at a single company.
Some insurers let where you live play a larger factor than others, however.
The company where location had the largest effect on rates was Horace Mann Insurance Company. At Horace Mann, the difference between the cheapest territory (Pickens) and the most expensive territory (Horry) was a full $584.
And at 21st Century Centennial Insurance, a quote for the most expensive territory was nearly double the price of the cheapest. The most expensive territory was 91% higher than the cheapest territory.
On the other hand, territory plays a smaller role in some insurers’ pricing formulas. At Liberty Mutual, the difference between the lowest-priced territory (Cherokee) and the highest-priced territory (Williamsburg) was just $87.
The following chart visualizes the size of the territorial price gap at each insurance company included in the study.
No matter where you live, make sure to shop around
Regardless of where you live, one thing the analysis showed is that it pays to shop around.
The quotes included in the analysis all were for a 34-year-old single male driver with a good driving history. But despite that variable being the same for all of the quotes, the price fluctuation between companies was huge. The lowest out of all 920 quotes was $414. But the highest was a whopping $1,528.
And this gap wasn't due to location. When you look at a single territory, $751 was the average gap between the quote from the cheapest and most expensive companies for a single territory. In this case, the gap is just due to differences in different companies' pricing formulas.
Consider what this means for you: If you don’t shop around for your coverage and end up unwittingly choosing the highest-priced insurer, you could be paying more than double what you could be paying if you shopped around extensively.
The chart below shows the price ranges among the 20 companies for each of the 46 territories included in the study. Which would you rather pay: the prices on the left side of the orange bars, or the prices on the right?
Table: Territorial pricing gaps at 20 South Carolina auto insurers
|Company||Territorial gap*||Quote for cheapest territory||Quote for most expensive territory|
|Average for all 20 companies||$283||$721||$1,004|
|Liberty Mutual Insurance Corporation||$87||$813||$900|
|United Services Automobile Association||$149||$507||$656|
|American National General Insurance Company||$160||$416||$576|
|American National Property and Casualty Company||$162||$414||$576|
|Amica Mutual Insurance Company||$194||$788||$982|
|Travelers Home and Marine Insurance Company||$221||$807||$1,028|
|South Carolina Farm Bureau Mutual Insurance Company||$230||$595||$826|
|Travelers Commercial Insurance Company||$252||$889||$1,141|
|Allstate Fire and Casualty Insurance Company||$282||$940||$1,222|
|Nationwide Insurance Company of America||$282||$661||$943|
|National General Insurance Company||$293||$922||$1,215|
|State Auto Property and Casualty Insurance Company||$341||$823||$1,164|
|USAA Casualty Insurance Company||$343||$486||$829|
|Automobile Insurance Company of Hartford, Connecticut||$370||$890||$1,260|
|Garrison Property and Casualty Insurance Company||$385||$542||$927|
|Hartford Accident & Indemnity Company||$431||$984||$1,415|
|21st Century Centennial Insurance Company||$463||$508||$972|
|Horace Mann Insurance Company||$584||$945||$1,528|
|*The difference between the lowest quote and highest quote for a territory.|
Table: Price ranges between companies in 46 South Carolina territories
|Territory||Difference between highest quote and lowest quote||Lowest quote for this territory||Highest quote for this territory|
|Average for all 46 territories||$751||$508||$1,260|