Purchasing a home is an exciting and momentous occasion that brings many changes. One area of change that homebuyers often overlook is their auto insurance policy. If you purchase a home, it could impact your auto insurance in several ways.
Location Changes Rates
First, your auto insurance rates may change anytime you move simply because you're at a new address. Auto premiums are based on many factors, and one of those factors is the zip code where you live. Your zip code affects how likely your car is to be broken into and other items.
If your new house is in a different zip code -- and especially if it's in a whole other state -- expect your auto insurance premiums to change slightly as a result. Depending on the zip code you're going to and where you're coming from, the rates might go up or down.
Protected Parking Reduces Rates
Second, your auto insurance rates could go down if you'll now be parking in a different type of location. With regard to parking and auto insurance, you can consider three main categories of places:
- On-street parking (e.g. parallel parking)
- Off-street parking (e.g. parking lot or driveway)
- Secured parking (e.g. private garage)
These three categories are listed in order of riskiest to least risky, and the risk level corresponds to your auto policy's premiums. If you're going from an apartment that had on-street parking to a house with a driveway, expect your premium to go down. They'll also go down if you move into a house with a garage from a residence with only a driveway.
Multi-Policy Discount Significantly Reduces Rates
Third, you'll qualify for a multi-policy discount once you own a house and a car because you'll need both. So long as you purchase your homeowners' insurance and your auto insurance from the same insurance company, you'll get this discount.
Moreover, this discount can be especially beneficial because you'll get the discount on both your homeowners' insurance and your auto policy. The discount is usually percentage-based, so it can be quite substantial if you have high premiums.
Good Credit Reduces Rates
Finally, you might qualify for lower auto insurance rates if purchasing a home improves your credit.
Whether you'll get this benefit depends on where you live, for not all states let insurers consider credit score when setting auto policy premiums. If you live in a state that does, however, taking out a mortgage can improve your credit by changing the mixture of your debts. Once the improvement is reported to the credit agencies, you can get a slight premium reduction.
To learn more, contact an auto insurance company.