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Living in a high-cost area is never easy on your pocketbook. High-cost areas may even have exorbitant auto insurance costs.

When living in paradise costs an arm and a leg, it's no longer paradise. Places like Honolulu and San Francisco might seem like a dream, but the cost of living is so high it prices out even those who earn the average salary in the city. A high supply and demand chain keeps costs of housing and transportation -- among others -- on the top end of the scale.

This is where examining your car insurance policy can save some dough.

Let's take Honolulu, for instance: for a family of four, monthly costs average just under $10,000, with housing coming in at an average of just under $1,900 a month -- that's 24.4% above the national average. That same family will pay just under $1,100 per month on food costs. Check out Insure.com’s Cost of Living Calculator.

Our research found that the average auto insurance policy in the state of Hawaii is $1,458, or $103 above the national average. If you do your homework, you would be able to save hundreds on a full coverage policy. We found that car insurance in Hawaii ranged from $857 for a 40-year-old male with Geico to $2,376 with Farmers.

Another high-cost area is San Francisco, where the monthly living costs for a family of four average a whopping $12,370. Housing alone costs an average of $3,100 a month -- putting the city at 24.7% more expensive than the rest of the country.

The average auto insurance policy runs $1,518 per year or $163 more than the rest of the country. As is the case with Hawaii, insurance in California also runs the gamut of cost, with Geico on the low end at $944 for a 40-year-old male, and State Farm on the high and at $1,967.

It's important to keep in mind that high cost of living and high auto insurance policy rates don’t have to go hand in hand. Michigan, for example, hovers around the country's average cost of living yet has some of the highest auto insurance policy rates. A 40-year-old man can get a full coverage policy from Geico at $1,027. That same policy costs just under $4,000 from State Farm.

According to Jennifer Appo, owner of Premier Insurance Agency in West Bloomfield, Michigan, because it is a no-fault state, where insurers pay medical bills and lost wages without question, rates run high. Legislation has been passed to address this, but it won't take effect until 2021.

"Insurance companies are in business to make money, so the cost to cover the medical part is passed on to consumers," she said.

  • Even if you are living in a high-cost area, there are still ways to save on your car insurance policy.
  • You can save on insurance by combining your auto insurance policy with your homeowners or renters policy, says experts.
  • Make sure you maintain a good credit score, if you live in a state that allows the insurance companies to use credit score as a factor to determine car insurance rates.
  • Another way to save on insurance is by comparison shopping. Compare quotes from insurance companies and avail all discounts you are eligible for.

How you can get cheap car insurance in high-cost areas

Regardless of where you live, there are ways to save on your auto insurance policies. There are no hard and fast rules for determining and doling out discounts. Typically, your auto insurance company will start with assigning you a base rate. Then, after assessing your risk levels, they will consider any factors that might afford you a discount.

Before you look at discount factors, take into account the average base rate for a 40-year-old male. Almost across-the-board Geico takes the cake for the cheapest base rate. In most states, they are at least half the price of their highest competitor. Because of this price disparity, you will want to comparison shop.

"Not only do you want to comparison shop, you will want to get quoted yearly or every six months depending on your policy length. I sell insurance and even I get re-quoted regularly to get the best price," she said.

That's not the only way to find savings though, according to Appo.

"There are a few big ones. If you can combine your auto insurance with another line like homeowners insurance or renter’s, you'll see some savings," she said.

Appo also suggested not letting your policy lapse, staying loyal to one company, and maintaining a good credit score, especially if you're in a state that is allowed to use credit as a factor. All of these should earn you some savings on your policy.

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