Which RI Zip Code Has the Highest Auto Insurance Rates and Why?

Wednesday, March 12, 2014

Victor Paul Alvarez, GoLocalProv Contributor

If you’re in zip code 02909 you’re paying the highest car insurance rates in Rhode Island. Experts say the high rates aren’t the result of car theft or vandalism, but rather the number of uninsured motorists on the road.

“Providence in general is vastly more expensive than elsewhere because of insurability. One out of four drivers on the road are driving without insurance. And the people with insurance are subsidizing all of those people,” said Edwin De Jesus, owner of Edwin De Jesus Allstate Insurance in Providence.

De Jesus said 02909 is Providence zip code that runs into Cranston. A 12-year veteran of the insurance business, De Jesus said rates go up every year. In his opinion, this will continue until Rhode Island adopts stronger car insurance regulation similar to regulations in Massachusetts.

“We operate in Rhode Island and Massachusetts. The one advantage Massachusetts has is you can’t get car registration without insurance. In Rhode Island, there’s no accountability for who has insurance and who doesn’t have insurance.”

Multiple factors considered in rates

Rhode Island insurance rates, like anywhere else, are based largely on factors such as driving record, age, gender and marital status. Insurance formulas also calculate lapsed or canceled policies, make, model, and year of your vehicle, and how your car is used. Rhode Island requires the name of your insurance company and your policy number to register a car or renew its registration. However, De Jesus said drivers have found loopholes that allow them to drive uninsured without detection.

“Customers will pay the down payment on the insurance and never make a payment again. When that policy expires and they need to register their car they’ll play the same game and take another policy.”
This game doesn’t work in Massachusetts, where insurance and registration are linked more securely.

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“In Massachusetts, if your policy is canceled the insurance company notifies the registry. In 15 days, they cancel your registration. Our rates would be a hell of a lot cheaper if they did that here. There’s absolutely no accountability from our state level. If we mirrored the system in Massachusetts it would help everybody’s pockets.”

Using alternate zip codes to lower rates

Industry experts say some Rhode Islanders get around these astronomical rates by registering and insuring their vehicles in a different zip code where they work or own another property. If one can’t – or won’t – pull off this trick, the remaining option is the Rhode Island Automobile Insurance Plan. Established for high-risk drivers, this state insurance pool can be accessed by any insurance agent. The insurer that draws your name will likely charge crushing rates. After three years with a clean record, that insurer must offer you a standard policy.

Tim Foley, Business Manager at First Acura in Seekonk, said Massachusetts residents can typically drive right off the lot because their registration is proof of insurance.

“The car must be insured before it rolls off the lot. A Massachusetts customer can typically drive right off the lot because their registration wouldn’t be active if they didn’t have insurance,” Foley said.

Which RI Zip Code Has the Highest Auto Insurance Rates and Why?

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