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Dear Driving for Dollars,
My family and I finally stopped renting and bought our own home. It’s in the same town, about 2 miles away from where we used to live. I just called my car insurance company to report our new address and to my surprise, they told me our auto insurance went up as the result of the move.

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How could that be? We live in the same town!
— Ginny

Dear Ginny,
Congratulations on becoming homeowners! I’m sorry that this new property means higher car insurance rates, but I think I may be able to demystify the situation. Although you moved only a short distance from your old house and you stayed in the same town, are the 2 addresses in different ZIP codes?

If they are, then that is probably the culprit. A Bankrate survey found that prices for car insurance can vary widely at 2 addresses a relatively short distance apart but in different ZIP codes. The study, which looked at 3 hypothetical customers with varying driving habits, compared insurance rates with neighboring ZIP codes and found differences in prices — sometimes big differences.

Auto insurers in most states (though notably, not California) mark geographic locations by ZIP code to determine car insurance rates. It’s not really the ZIP code that the calculation is based on, but what the area of the ZIP code represents — factors such as population density, disposable income per capita and accident frequency, just to name a few.

Are you planning on switching car insurance? First check your credit score for free at myBankrate.

There are so many factors at play in car insurance rates that I always recommend getting multiple rate quotes anytime there is a change in life status, such as adding or removing a driver, moving to a new residence or considering buying a new car.

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If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories. Follow her on Facebook here or on Twitter @SheDrives.

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