Want to save on car insurance? Live in Roanoke

Where you live makes a big difference when buying car insurance.

Auto insurance is a lot cheaper in Roanoke than in other cities, according to a survey by Runzheimer International, a vehicle-cost consulting firm.

The Michigan company's figures show a car owner in Detroit would pay $5,000 more per year than an owner in Roanoke.

Other Southern cities that are insurance bargains include Nashville, Tenn.; Chattanooga, Tenn.; and Raleigh, N.C.

Among the Northern cities with high rates are Philadelphia, New York and Newark, N.J., according to Runzheimer, which said it was citing rates as they existed in January.

A key piece of data for insurance rate-setters is the ZIP code.

A ZIP code's claims history and number of registered drivers are part of the rate formula used by insurance company actuaries.

Ken Schrad, spokesman for Virginia's State Corporation Commission, said one reason Detroit's rates are high is that traffic accidents are more frequent in large metropolitan areas. Roanoke's smaller size helps keep both the chance of an accident and the insurance rates down, Schrad said. The commission regulates insurance companies, as well as banks and utility companies.

"Roanoke is not as densely populated as some metro areas," Schrad said. "In Northern Virginia, the insurance rates are higher than Roanoke, and rates in Tidewater may be higher, too."

Virginia drivers may have trouble duplicating the exact rates quoted in Runzheimer's survey, which was based on the rates for a 2005 vehicle with one driver who has a spotless driving record, and drives for his or her job.

A quick online search by The Roanoke Times failed to find any companies quoting the rates Runzheimer cited, but the sharp difference between Roanoke and Detroit was apparent in the Times' survey.

Medical insurance is a huge factor in Detroit rates.

Michigan's required no-fault auto insurance coverage put the cost of medical coverage alone at $2,230 for a six-month policy on a 2004 Toyota sedan with two drivers. Virginia drivers are permitted to decline that coverage and pay nothing in the medical category.

For collision coverage on that same car, Michigan set a rate of $1,400. The Virginia rate was $280 for collision coverage.

Runzheimer quoted Pete Kuhnmuench, director of the Insurance Institute of Michigan, as citing the state's mandate for unlimited medical benefits.

"No other state comes close to mandating that high level of benefits," Kuhnmuench said.

Runzheimer explained its survey this way:

"At $5,894 per year for insurance coverage for a midsize sedan driven within a 50-mile radius of the city, Detroit-area drivers pay almost $5,000 more a year than drivers in Roanoke, who pay only $912.

"These rates are based on both male and female drivers over a minimum age with clean driving records and include comprehensive, collision, bodily injury, property damage, and uninsured motorist coverage," Runzheimer said in a news release.

Schrad said another survey that compared Virginia insurance rates was done by the National Association of Insurance Commissioners. That survey, in 2003, cited Virginia's average car insurance rate as $752, which Schrad said ranked the state at approximately 40, meaning 10 other states had lower rates.