Does Your National Address Affect Car Insurance
Do you live where it costs the most—or least—to buy car insurance? well, maybe you have never considered this. But, your national address i.e. where you live can undoubtedly determine how much you pay for car insurance! Overall, your rate may go up or down based on your national address. For example, if you compare comprehensive insurance rates between drivers in Riyadh and drivers in Al Baha, you will find that insurance rates are way cheaper in Al Baha— even though everything is exactly the same, including your driving record and the make of your car.
Here we’ll explain everything about your national address, and the role it plays in how much you pay for car insurance.
What does your National Address look like?
Basically, national address is a precise addressing system, which SPL introduced to cover over 4.5 million locations from remote villages to large cities across the Kingdom. This system transforms a traditional detailed address format into a short format, that consists of 6 basic components:
- Building number
- Street name
- Secondary – an additional number.
- District
- City
- Postal code
Combined these six components effectively communicate the exact location of an individual. In turn, registering your national address qualifies you for a higher level of government and commercial services. In particular, this includes receiving your government documents — like your car insurance policy — as well as commercial and personal shipments without much hassle!
Why does my car insurance need my national address
Sometimes it can seem like car insurance companies want to know everything about you, from the type of car you drive to where you live! But, there are two main reasons insurance providers need to check your address.
First, providing your address is a must to conduct any financial transaction in Saudi; given that an address is a major identification attribute to verify a person’s identity. And after all, insurance companies need to know where to send your policy and other documents.
Other than needing to verify your identity,, your address is an important consideration for insurance providers when determining price; because it holds key information for insurance companies on the risks you face as a driver and car owner.
How can your location affect your car insurance
Generally, calculating car insurance rates comes down to risk. Risk means how likely someone is going to claim, and how substantial this claim could be. And to assess this, insurers look at previous claims history to identify location-based factors.
Here are the factors that would subject you to higher insurance rates.
- Car accident volume. More cars imply more traffic, and whenever there’s more traffic, the chances for you to be in a car accident are more. Put simply, more accidents equals more claims.
- Car theft and vandalism rate. A crime-prone area is often targeted for car theft, wheel theft, and other acts of vandalism. Consequently, this puts more pressure on the insurance companies to insure cars here.
- Extreme weather. Areas with extreme weather like heavy hail and flooding will definitely claim more car damage. As a rule of thumb, anything that would generate insurance claims regularly, will surely drive up rates in your area.
- Poor road conditions. Undeniably, the condition of roads play a decisive factor in the rate of accidents.
- Uninsured drivers. Considering that fewer people have insurance relative to the area’s population, insurance companies have to charge higher rates to help cover the higher expenses of accidents. Raising insurance awareness and increasing the number of insured drivers in Saudi would go some way in helping to reduce prices.
Changing your National Address
Changing your address can change your level of risk. So, if you decide to move, you should contact your car insurance company to update your policy information as soon as possible. Also, most companies give you online access to your insurance account which helps you to manage your policy.
On the other hand, failing to update your insurance company about your move may lead to a rejected claim or even invalidating your insurance. Therefore, it’s important to keep your insurer in the picture.
Finally, let’s draw your attention to something important. Giving an insurance company an address that is different from where a person lives, and where their car is regularly driven, is at worst, insurance fraud, and at best, non-disclosure of facts.
To sum it up, your national address impacts your car insurance rate, because insurance companies examine data that determines which areas residents are most likely to file claims. However, your address is just one of the many factors that affect car insurance rates, and insurance companies differ in regard to how they weigh all of these determining factors. If you are trying to get better insurance rates, the best thing you can do is compare car insurance rates from different companies online.
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