It’s tax time which means many Australians will be looking at their living expenses and seeing where they can make some changes to save money this financial year.
Car ownership can be extremely expensive when you factor in all costs including registration and car insurance.
However, many Australians will be surprised to know that the location of your home can significantly impact the price of your car insurance.
Location, location 
Car insurers take into consideration a variety of different factors when determining the price of your policy.
As a general rule, if it affects the odds of you making a claim, it will impact the price of your premium.
The location of where you park your car the majority of the time is one of the most significant factors.
From your specific address, right up to the the state you live in or whether you’re in a rural or an urban area, these things are all factored into your policy.
State by state
The price of car insurance varies depending on the state you live in.
For example, car insurance is most expensive in New South Wales and Victoria, while Tasmania tends to be the cheapest overall.
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There are a number of different reasons it can change so much between states, for example:
- Compulsory Third Party (CTP) insurance: This mandatory cost is determined at a state level so you’ll find the price differs depending on which side of the border you reside.
- Competition: Some insurance brands don’t operate nation-wide. Areas with more insurance companies competing for business might encourage lower prices.
- Number of claims: The more claims originating from a particular state, the higher car insurance premiums in that state will be.
City vs Country
The more densely populated the area generally the busier the traffic is on the roads.
As a result there are usually more car accidents overall, which increases the risk of claims and therefore the price of premiums.
While you’re more likely to have a cheaper premium if you live in a rural area, sometimes this isn’t always the case as you may need to drive longer distances to get to work, the roads can be in worse condition and you may be more likely to lose a car to bushfires or other hazards than someone living in the city.
Postcode dangers
Insurance providers will apply specific loadings based on your exact home address. 
Risk factors and therefore premium prices vary between postcodes as much as between states.
This takes into a number of factors including how wide your street is, if it is close to a dangerous intersection and the crime rate in your area.
- Where you park: You’ll find the price of your policy is impacted by whether you park in an enclosed garage or carport overnight verses on the street, which is considered more dangerous.
- Bad weather. Areas prone to bad weather including rain, snow, fog also usually see a higher number of car accidents.
- Dodgy neighbourhood. If your policy includes cover for theft, the crime rate in your suburb will impact the price of your policy.
- Road maintenance. Poor road conditions like potholes can cause accidents so having better maintained roads in your area can lower premiums.
While you wouldn’t pick up and move house purely based on the price of car insurance, it’s worth understanding how location can impact the cost of your policy so you can better compare all your options.
