First Person: Living in a Dangerous City Is Bad News for Insurance Costs

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CNNMoney recently published a report of the 10 most dangerous U.S. cities. The report used crime statistics for 2011 in major U.S. cities to determine which ones are riskier than others. Unfortunately, my hometown, New Orleans, Louisiana came in at number five on the list.

According to CNNMoney, the murder rate in New Orleans is 20 percent higher than Detroit, Michigan (another city on the worst of list.) In 2011, New Orleans had 199 murders, up from 175 in 2010, making the murder rate three times higher than both New York and San Francisco.

While finding out that I live in one of the most dangerous crime filled cities in the United States certainly isn't good news on any scale, it is even more disappointing when you realize what that means for my personal finances. Thanks in part to the crime rate; I deal with higher insurance premiums and a host of other charges like pricey alarm systems.

When I first moved to New Orleans nearly a decade ago, I was warned that my auto insurance premiums would increase. My insurance agent actually asked me if I was sure I didn't want to move somewhere else, but I figured it wouldn't be that bad. I was wrong. Less than a year ago I was paying nearly $300 a month for insurance on a newer sports car. I downgraded to a cheaper vehicle and it didn't make much difference. I still pay $195 a month for full coverage, partly because my neighborhood is consider a "high theft risk."

Then there is renter's insurance. Since the auto insurance agent considers my neighborhood risky, so does my renter's insurance agent. When I was shopping for insurance, one agent told me that I could pay up to 30 percent more to live inside the city limits, mostly due to the crime rate. Now I pay $54 a month for a small policy, almost double what I paid while living in Dallas, Texas.

I also face other smaller, but still annoying, charges. The insurance agents aren't entirely wrong, we clearly have a crime problem in this city and my neighborhood isn't the best. To reduce my risk factors, I installed an alarm system, (which costs $210.) Now I pay for monitoring at $27 per month. Overall, I pay more than most U.S. cities in insurance premiums and another $324 a year for peace of mind.

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