Claims Frequency
Some regions, generally cities or urban areas, have an increased risk of accidents. More people and more cars equal more accidents. A specific area with a high population density will frequently have more insurance claims; this will raise prices for all who live there. On the other hand, a rural area with few people and fewer cars will have a lower premium because cars and car collisions are less likely to happen.
Local Weather Conditions
Areas with frequent flooding, snow, hail, and blizzards or other extreme weather conditions will bring a higher premium. Harsh weather also deteriorates road conditions which raises the probability of accidents. Frequent flooding will rust cars, and hail can directly damage windshields and knock dents. The forces of natures are a functional car's enemy, and the insurance companies realize this too.
Local Social Services
The safety services available in your local area can affect insurance rates as well. Roads that are well kept and well designed can prevent accidents. Local law enforcement and emergency response times will also have an impact. Faster response times, safer roads, and other positive social services will lead to lower insurance rates.
Theft/Vandalism Rates
If you live in an area where break-ins are frequent and crime is rampant, then your car has a higher probability of being stolen. High local crime rates do not bode well when insurance companies determine liability. Insurance rates are adjusted accordingly by insurance companies.
Competition
Insurance companies competing against each other have more of an impact on the state level. Some states have lower average premiums because of hotter competition between insurance companies. It is a fine line between undercutting competitors and charging enough to cover expenses.
Propensity to Sue
Let's face it. Some people are more lawsuit-happy than others, especially after an accident. Insurance companies may look at this, since they're the ones who have to cough up. Location and the number of lawyers per square mile in a given area may have a negative effect on insurance premiums. Not all insurance companies take this into account. Remember, moving just for marginally cheaper insurance rates will not be worthwhile in most cases. Your rates are most heavily influenced by you individually as a driver rather than anything else. Nevertheless, location is a factor in determining how hard insurance weighs on your wallet.