Living Close to a Restaurant Is Risky
12/13/2005
Car & Driver Magazine

Where you live might affect your auto insurance costs. Quality Planning Corporation, which researches accident probabilities for insurance companies, has found a relationship between where a person lives and their risk of an auto accident. QPC concluded that the riskiest place to live is within one mile of a restaurant, an address that ups your accident risk by 30 percent as being more likely to crash your car than if you lived more than one mile from the restaurant.

The study examined more than 15 million policyholders and two million claims, mapping the proximity of vehicle-owners' addresses to various types of businesses, including amusement centers, bars, churches, dentists' and doctors' offices, parking lots, banks, car dealers, car washes, child day-care centers, gas stations, medical buildings, movie theaters, optometrists' offices, schools and shopping centers. The study found that the riskiest places to live near are restaurants, grocery stores, schools and banks. At the other end of the scale, individuals that live within one mile of an airport, park, forest or racetrack are much less likely to suffer vehicle damage. When it comes to car crashes, churches are the least risky neighbor of all. People who live within one mile of a church are 10 percent less likely to have an accident resulting in a property damage claim than if they lived more than one mile from the church.

Insurance companies have historically based policyholders' rates on their ZIP code or where their vehicle is kept. While ZIP codes may be convenient and necessary for speedy mail delivery, they are not a particularly good predictor of property/casualty insurance losses, QPC says. 'It's important to remember that these observations are indicative of the area and we would naturally expect higher accident rates in higher traffic areas,' added Bob U'Ren, vice president of marketing at QPC. 'Traffic patterns and density are often key considerations when selecting sites for restaurants and grocery stores. There are also comparatively fewer homes and apartments, and generally lower vehicle use, close to parks and forests.

But who would have thought it is more dangerous to live by an elementary school than a liquor store? Or a bank versus a hotel?' The ability to assess risk at the street-address level is a major breakthrough in private passenger auto underwriting and will eventually lead to more accurate rating and could reduce premiums for some drivers. Increase in physical damage claims by living within one mile of Top Tier Bottom Tier Restaurant 30% Racetrack or amusement park 11% Grocery store 26% Hotel, motel, resort or spa 5% Elementary, secondary school 26% National park or forest 4% Bank 25% Local or community park 3% Car dealer 23% Airport 2% Gas station 22% Doctor's office or clinic 1% Liquor store 18% Religious institution -10% More news