Why is My Auto Insurance More Expensive than My Neighbor’s?

By Brad Davis, CIC (June 30, 2025)

Ever looked at your neighbor’s car and thought, “We drive similar vehicles, we live in the same area – why is my auto insurance more expensive than theirs?”

You’re not alone. At Davis Insurance Associates, we hear this question all the time from clients in Myrtle Beach and across the Grand Strand. The truth is, auto insurance premiums are highly personalized. Just like no two drivers are exactly the same, no two auto insurance policies are priced the same either.

In this blog post, we’ll break down the factors that make up your auto insurance rate and help you understand why your premium may be different than your neighbor’s – even if things look pretty similar on the surface.

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Quick Summary: Why Is My Auto Insurance So Expensive?

Auto insurance rates are based on a wide range of personal and policy-specific factors including your driving record, credit score, vehicle type, coverage limits, and even your claims history. Just because you and your neighbor live on the same street doesn’t mean your risk profile (or your policy) is the same. Read on to learn what’s driving the difference.

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1. Driving History: Every Ticket and Accident Counts

Your driving record is one of the biggest factors affecting your auto insurance premium. If you’ve had speeding tickets, at-fault accidents, or DUI convictions, insurers will view you as a higher risk – even if your neighbor has a spotless record.

Example:
You and your neighbor both drive 2020 SUVs, but you had a minor fender bender last year and they didn’t. That one claim could raise your rates for several years.

Tip: Many insurance companies offer accident forgiveness programs or safe driving discounts. Ask your agent if you’re eligible.

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2. Credit Score: It Plays a Bigger Role Than You Might Think

In South Carolina (and most states), insurers are allowed to use your credit-based insurance score when determining your premium. Statistically, drivers with better credit are less likely to file claims, so they’re rewarded with lower rates.

Surprised? A lot of people are. But this is a major reason why your auto insurance might be more expensive than your neighbor’s, even if your cars and driving records are similar.

Tip: Improving your credit score over time can help reduce your insurance costs—not just for auto, but for homeowners and other policies too.

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3. Type of Vehicle: Make, Model, and Safety Features Matter

That luxury sedan with all the bells and whistles? It might look nice in the driveway, but it’s probably more expensive to insure than your neighbor’s basic pickup truck.

Insurers consider several vehicle-related factors:

• Cost of repairs and parts

• Likelihood of theft

• Crash test safety ratings

• Size and weight of the vehicle

Example:
If your car is newer and has advanced technology like lane assist and adaptive cruise control, those features can help prevent accidents—but they can also be expensive to repair, which may drive up your rate.

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4. Coverage Selections: Apples and Oranges

Let’s say you and your neighbor both drive similar vehicles, but your insurance rates are wildly different. One big reason could be the coverage limits and deductibles on your policy.

• Are you carrying more coverage (comprehensive and collision), while your neighbor just has liability?

• Did you choose low deductibles to avoid out-of-pocket costs, while they opted for higher deductibles to save money?

Your policy may be more expensive simply because it offers better protection. And in many cases—that’s a good thing.

Tip: It’s not always about the cheapest rate. The right coverage protects your finances, not just your car.

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5. Mileage and Usage: How Often (and How Far) You Drive

How much you drive each year—and what you use your car for—also impacts your premium.

• Daily commuters who log more miles are statistically at higher risk of accidents.

• People who work from home or drive fewer miles may qualify for low-mileage discounts.

• Rideshare drivers or people who use their vehicles for business typically need special coverage and may pay more. (Though it is important to let your agent know if you use your vehicle for rideshare, food delivery, or other business. The additional cost is well worth the benefit of being better covered if a claim arises.)

So, if your neighbor is retired and only drives to the golf course a few times a week, while you commute to work every day, your insurance rate will likely reflect that difference.

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6. Claims History: Not Just Yours, But Also the Area’s

You might have a clean driving record, but if your insurance history shows previous claims—especially multiple claims or recent ones—your rates may be higher.

Even where you live in Myrtle Beach or the surrounding area can play a role. Certain ZIP codes have higher rates of:

• Accidents

• Vehicle theft

• Storm damage

• Lawsuits

If you’ve moved recently or live near a busy intersection, your rates may be higher than someone in a quieter neighborhood nearby.

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7. Discounts: Are You Taking Advantage of Them?

There are dozens of auto insurance discounts available, but not everyone qualifies – or remembers to ask for them. Your neighbor may be saving big with:

• Multi-policy discounts (bundling home and auto)

• Safe driver discounts

• Good student discounts

• Military or senior discounts

• Telematics or usage-based programs – this is becoming more popular over the last few years. Good drivers often save up to 20 – 30% on their auto insurance premiums.

If your neighbor is taking advantage of more discounts than you, that could explain the price gap.

Tip: Have your insurance agent do a full discount review each year to make sure you’re not missing out on savings.

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8. Company and Underwriting Guidelines: Not All Insurers Price the Same

Even if you and your neighbor are insured by two different companies, your rates can differ based on how those companies evaluate risk. Each insurer has its own underwriting guidelines, rate structures, and pricing models.

Some carriers favor drivers with excellent credit and long histories with the company. Others are more competitive for newer drivers or those with a blemished record.

That’s where working with an independent agency like Davis Insurance Associates really helps.
We shop multiple carriers for you to find the best match for your unique situation.

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9. Policy Start Date and Rate Changes

Auto insurance rates don’t stay the same forever. Your neighbor may have locked in their rate months ago, before a recent rate increase went into effect.

Many insurers are adjusting premiums across the board due to:

• Higher repair and parts costs

• Increased claim frequency

• Labor shortages at repair shops

• Rising medical and legal costs

Even if nothing changed on your end, the rate environment may have shifted.

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What You Can Do to Lower Your Auto Insurance Costs

If you’re feeling frustrated by how expensive your auto insurance is, don’t worry – there are some smart steps you can take:

1. Review your coverage and deductibles – Are you paying for more than you need?

2. Ask about discounts – Especially bundling or safe driver programs.

3. Improve your credit – Long-term strategy, but it pays off.

4. Compare rates – Don’t just go with the same company year after year.

5. Talk to your agent – A good agent will help you understand your options.

At Davis Insurance Associates, we’re here to make sure you’re not overpaying and that you understand what you’re paying for.

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Final Thoughts

So why is your auto insurance more expensive than your neighbor’s? The answer lies in the details – your driving history, your coverage, your vehicle, and even your credit score. It’s not always fair on the surface, but it is how insurance works.

While we do get this question from time to time, I don’t want readers to get the wrong impression. More often we gain new clients because they are paying more than their friend that referred them to us. I feel we do a great job applying all the discounts and providing adequate coverage at the best value (notice I didn’t say cheapest price).

In addition, I kind of like it when a client calls and asks about this. It gives us an opportunity to review their policy and usually point out that their policy is not the same as their neighbor’s (usually it has better coverage).

The good news? You don’t have to navigate this alone.
At Davis Insurance Associates, we help Myrtle Beach area drivers like you get the right coverage at a competitive rate—without the guesswork.

Ready to shop your auto insurance or ask questions?

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📞 Or give us a call 843-213-0000 (opens in new tab) – we are happy to help.