If you have recently moved in Canada, once your auto insurance policy renews, you might be in for a little shock when the invoice comes. A very important, yet very common, question is continuing to be asked all over Canada: “I Moved… Why Did My Insurance Rates Increase?
To make sure we give this frequently asked question its fair share of time, we put together some points to help explain what’s happened….
Where You Live
In Canada, auto insurance rates are based on the postal code you live in. Different territories in our country determine insurance risks and rates, and each territory is rated on a number of key factors. The primary things that affect your insurance rates are:
- The number of claims from others who live in the same postal code.
- Whether you live in a rural or urban environment.
- What natural or man-made features are near your property.
Let’s look at each of these in detail and explore how they affect your auto insurance rates.
The Number of Claims in Your Postal Code
The postal code that you live in plays a large role in how much your auto insurance costs annually. Insurance companies look at the number of claims in a given territory and adjust rates accordingly. If you move into a territory with a higher number of accidents and claims, your insurance rates are likely to rise because you will be driving in a higher risk area.
Note that where you live is a rating factor, not where an incident took place. Your neighbor could be in an accident 100 kilometers away, and it will affect your rates because he lives in your neighborhood.
This is beneficial when you live in a low-risk area because your rates will not be increased if someone has an accident while just passing through.
Rural vs. Urban Environments
If you’ve moved from a rural environment to a busy city, you’ll quickly notice a large difference in your auto insurance rates. Statistically, urban environments have much more potential for auto accidents and damage claims. There is much more traffic, many stop signs, busy intersections, pedestrians, bicycles, buildings, street-side tables or vendors, events and activities—all of which can be potential hazards and risks.
When you live away from all of that in a rural environment, the pace is naturally much slower. There are fewer people driving automobiles, the buildings are farther apart, and there is less activity around you in general. Sometimes you can drive for several kilometers in a rural area without encountering any hazards, and all of that reduces the chances you’ll have an accident.
What Features Are Near Your Property
Sometimes, the landmarks near your property affects your auto insurance rates. If you live close to a large body of water, for instance, that is considered a higher risk because if there is a flood, your vehicle could be damaged.
Also, the type of home you live in plays a role, as does how close you are to a hydrant or fire hall. The size and makeup of your home—in comparison to hydrants and fire halls— can cause your car insurance rates to increase or decrease. The materials its built of, how large it is, and the heating type, all play a role in determining how much risk of loss there is to the home.
Final Thoughts
When planning a move, there are many items one must consider. Most of us think of things such as cost of living, available living spaces, quality of schools, entertainment, and job availability. If you own a vehicle; however, you may want to take a much closer look at how moving will affect your insurance rates as well.
In Toronto alone, you could choose one of over 20 neighborhoods that potentially cause your insurance rates to rise above $2000 per year. Being aware of this from the beginning and searching around for a home a little more, could you save several hundred dollars a year.
To learn more about why your car insurance went up when you moved, contact Duliban Insurance Brokers at (855)-385-4226. Our licensed professionals will be happy to answer any questions you have.
