You probably already know that your address affects your home insurance rates, but did you know that it affects what you pay for car insurance as well?
Let’s explore how your address impacts how much you pay for insurance so you can shop for the best premiums wherever you live or plan on moving in the future.
Why does your address affect your auto insurance rates?
In addition to differing significantly by province, auto insurance rates also vary by region, city, and even by neighbourhood.
Reasons insurance rates might be higher within a relatively small area like a municipality include:
- A higher number of claims.
- More traffic tickets, accidents or driving violations.
- No access to private, indoor and aboveground parking.
- High traffic congestion or rates of speeding.
- Proximity to major highways.
Despite these common factors that affect rates, insurance providers don’t always calculate their customers’ premiums in the same way. So it’s important to get quotes from several insurers to determine how much you will spend for comparable auto policies.
How could moving to a big city affect your insurance?
Average insurance prices tend to be relatively low in quiet, low-traffic downtown neighbourhoods where most residents walk, bike or take public transit daily.
If you live in an urban area similar to the central Toronto neighbourhoods of Bracondale Hill, Hillcrest Village, Palmerston-Little Italy, Koreatown and Davenport, you’re more likely to enjoy lower insurance rates. The walkability, bikeability, and public transit options available in these types of areas, can help you:
- Save money on gas.
- Reduce wear and tear on your car.
- And apply for low mileage driver insurance discounts.
On the other hand, moving to a larger city (especially in the GTA) can also increase what you pay for insurance. In Ontario, Vaughn and Ajax have the highest insurance rates on average. Learn more about which cities in Ontario have the highest car insurance rates.
According to LowestRates.ca: Toronto neighbourhoods in the M6E and M4X postal codes pay the most expensive insurance rates in Canada’s most populated city partially due to:
- Proximity to the 401 and the Don Valley Parkway.
- High population density and street congestion.
- The presence of major streetcar routes.
- A high number of one-way streets.
- Street parking is the main parking option available to residents.
What if you move your address to a rural area?
Moving from an urban or developed suburban area to a rural location can also affect your insurance rates in some unexpected ways. For example, you may be driving on less congested roads in the country. Still, insurance companies also think about how much you need to drive and the infrastructure in your area.
- Does moving out of the city mean you’ll need to commute farther to work?
- Will you need to drive farther distances to run errands and access leisure activities?
- How well are roads in your area maintained, and are they paved? For example: regularly driving on gravel roads could increase your chances of cracks in your windshield.
- How easily can emergency services access your neighbourhood in the event of an accident or fire?
How else does changing your address or moving affect your car insurance?
When you think about moving, how your move will change your daily commute probably gets more consideration than its impact on your insurance premiums. The great news is that moving closer to work can also help you save money on auto insurance!
Of course, your insurance company will still look at other ways your new home impacts your likelihood of making a claim. Still, a short commute or no commute (if you can avoid driving to work) is a meaningful way that your actions affect your insurance rate.
Make sure you tell your insurer about how your move will change your driving habits so you get the coverage you need and can access any available discounts.
What Happens if you don’t change your address on your car insurance?
Your address significantly affects your insurance rates because it’s linked to your likelihood of making a claim. Not telling your insurer about changing your address isn’t a risk you want to take because it could result in claim denial or the cancellation of your policy. It’s crucial that you always let your insurer know when you move so you have peace of mind on the road: knowing you have the coverage you need.
Besides Your Address: What other factors determine the price of your auto insurance policy?
Where you live is just one part of calculating your insurance rates. When you get an auto insurance quote, purchase or renew your policy, many other factors will determine what you pay.
- Your age and driving experience: Young and new drivers pay more for insurance than experienced drivers with a good record. Retired drivers may also be eligible for leisure driving or low-mileage discounts.
- Your driving history: It’s probably the most advertised fact in the insurance industry—safe, experienced drivers get insurance discounts.
- Your credit score: Insurers can’t use credit checks to calculate auto insurance rates in Ontario. However, they can use them to calculate home insurance rates with your consent.
Information for Drivers Added to Your Policy
- The number of drivers on your policy: Adding a secondary driver (especially a young new driver) can bump up your rates.
- Other qualifications: Did you recently add your child to your policy? Proof of their good grades or completing an accredited Driver Training Course can give you access to a discount.
What You Drive
- Type of vehicle: This includes your ride’s make, model, and age. Modestly-priced vehicles with a reputation for reliability and safety can help you save!
- Additional safety features or modifications: Safety features generally help you save on insurance. Don’t forget about those winter tire discounts! High-end improvements make it more costly to insure.
The Coverage You Choose
- Whether you have accident forgiveness: If you do, you’ll pay slightly higher premiums up front but have the extra protection of at-fault accident forgiveness.
- Your deductible: A higher deductible means you’ll save some money on your premiums, but you’ll need to pay more money out-of-pocket if you make a claim.
- Comprehensive coverage: We recommend purchasing comprehensive coverage to protect your wallet and vehicle from perils like falling objects and natural disasters.
- Collision coverage: Helps you pay for repairs after a collision with another vehicle or an object. Adding collision coverage and setting your policy limit and deductible will change your premium price.
Those are a lot of factors, and it’s the reason why everybody’s insurance price and needs are so unique! We work to make getting the best coverage easy and stress-free at aha. If you have any questions about your insurance or discounts, like bundling your home and auto policies, give us a call.
You can also get a quote anytime to find out how much you can pay for your personalized auto policy.
Now you know how your address fits into the big picture of how insurance companies determine your auto premiums. You’ll be able to choose your new home, inform your insurer, have the peace of mind that comes with coverage, and move with fewer surprises!