How your location affects your insurance rates

Moving can be a pretty big change. But did you know that it could also mean a change in your insurance premium? There are a number of factors that go into your insurance rates – including where you live. You could live in one neighborhood and move to a new area, city or province and your home and auto rates could end up being completely different. Here are a few reasons why your insurance rates could change due to a move.

How your location impacts your insurance rates

  • Age of your area (and home). If you live in an older area, it can have inadequate sewage systems, which could mean your home is at a greater risk for sewer backup. Plus, older homes, such as heritage properties, with out-of-date wiring and plumbing can also make it more likely that a fire or flood could happen in your home.
  • Proximity to other buildings. Your insurer looks at more than just if you’re moving into a detached, semi-detached, or row home. How far away your house is from neighbouring properties can impact how much you pay for coverage. Why? Because homes with less space between them can be exposed to more risk. For example, if a fire took place at your neighbour’s house, the closer your houses are, the more likely the fire could spread.
  • Fire services. This is about more than how far your house is from the nearest fire hydrant. When it comes to home insurance, the type of fire services in your area, such as if they are volunteer, is considered. Depending on how your area is serviced, it could impact your home premium. This is because when a fire happens, the longer the response time, the more damage that could be caused.

  • Crime rates. When determining rates, insurers review the past claims of different areas to help predict the likelihood of future losses. If, for example, theft or vandalism is known in your area, you might expect to pay higher premiums. However, it’s important to take proactive steps to improve your home security and to prevent car theft – it could help to lower the chance that you need to make a claim.
  • Traffic patterns. The more cars on the road and the greater the number of intersections, the higher the chance of a collision. This is why you’ll typically find higher auto insurance rates in highly-populated urban areas.
Did you know? Initial steps have been taken in Ontario to try to prevent insurers from using postal codes as a factor in car insurance prices.* At this time, however, your location can still be used in calculating your auto premium.
  • Environmental considerations. Across the country, different provinces experience different weather patterns and events. For example, hail is a familiar problem in Alberta, while B.C. is more prone to earthquakes. Other events like wildfires can also occur more often in one area than another. If you live in a place that is prone to a potentially damaging weather event, your home premium may be higher. Learn what natural disasters are common in your province.
  • Likelihood of flooding. Similar to environmental considerations, proximity to bodies of water that can cause flooding is another variable that can affect your insurance. How prone your area is to flooding could impact your eligibility for certain coverages (such as overland water coverage) or how much they cost.
  • Regulatory differences. Insurance is regulated at the provincial level, which means there can be different rules in place for Ontario compared to Quebec or Alberta or any other province. Each insurer has to file their rates (in other words, have their rates approved) by the regulatory bodies in the provinces they serve. The more regulated the province, the less flexibility there is on pricing.

Although location does impact your premium for both home and auto insurance, it’s not the only variable at play. From the characteristics of your home (such as heating) to your driving history, your decisions and actions can also help to influence how much you pay for coverage. And remember, there are always steps you can take to help you save on your insurance.

Find out how easy home and auto insurance can be. Ontario MPPs aim to stop auto insurers from charging based on postal codes