Can your location affect your car insurance premium?


Put simply—yep! Your location can definitely affect your car insurance premium, for a few reasons.

Why does your location affect your car insurance premium?

Just as mandatory insurance can differ between states, like CTP in SA and Green Slip in NSW, certain factors might influence your car insurance premium. Vehicle model, your driving history, and your location—thanks to varying levels of risk between areas—are a few of them.

When you take out car insurance, your provider will consider these location-related factors:

  • Whether you live in a city or regional area.
  • The address where your car is kept overnight.
  • How far you drive each year.

Are car insurance premiums cheaper in urban or regional areas?

The kind of area that you live in may affect your car insurance premium. Across Australia, more densely populated areas like Melbourne and Sydney could attract higher premiums than in Hobart or other regional areas.

The higher the population of your area, the more drivers there are on the road. As a result, there's a greater risk of accidents and likelihood that people who live in the area will have to make a claim.

That said, if you live regionally, your premium could also be affected if the quality of the local roads is poor, or the area is known for its wild weather.

Does moving house put your car at risk of underinsurance?

When you move house, your to-do list can get pretty lengthy. So, what happens if you forget to let your insurer know you’ve pulled up stumps and moved to another address?  

Depending on what level of cover you have, your car insurance might still be valid if an accident or theft happened not long after your move, provided you’ve relocating within the same state or territory. You may just have to pay the difference between your old and new premiums.

Remember, if you’re moving interstate you’ll need to update your registration and check if you need to purchase Compulsory Third Party insurance (CTP).

How can you save money on your car insurance premium?

Who doesn’t love a great deal? Knowing how to find the best car insurance rates for you can mean putting your hard-earned cash towards other things that matter—like that next trip away.

Insurers may offer discounted rates on policies if you buy them online. For example, you could receive a $50 discount on your AAMI Comprehensive Car Insurance policy when you get a quote and purchase it online.

Here are a few other ways to save on your car insurance:

  • If you can, opt to catch public transport, cycle or walk if you don’t need to drive. The distance that you expect to drive in a year can affect your premiums (not to mention the environmental and health benefits!).
  • You can choose to select a higher excess to lower your premium. But this does mean that if you make a claim under your policy, you’ll pay more for your excess.
  • If you have AAMI Comprehensive Car Insurance and don’t make a claim, you may benefit from our Safe Driver Rewards program with a credit of up to 15% the next time you renew your policy.

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Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Any advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it. Please read the relevant Product Disclosure Statement before you make any decision regarding this product. The Target Market Determination is also available. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.