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Many drivers have good knowledge as to what can affect their insurance rates. Yet, there may be a lot of variables that they are not aware of. Knowing what these are could make a difference in what an individual is going to pay for their premiums.

Does My Location Affect My Insurance Rates?


To the surprise of many, the answer to this question is yes. Some may feel that the insurance companies are being selective or biased because of this. Others think that premiums are higher because one lives in a higher calibre neighbourhood. That is not the case. Knowing this may answer the question of why one person’s rate is different. When compared to another person. Just taking into account the difference in addresses indicates this.

Is There Much Of A Difference In The Rates?

If it were only a difference of a few dollars than most would not care about the effect it has on the premiums. But, there are indications that the rates for some areas can be as much as $1000 less.  It does help to look at the location for the insurance. There are other factors involved.

Every province will be different in how the location they are in affects their insurance.

Differences in Ontario

In the  Toronto area there are some expensive places for insurance. It includes the Mississauga, Richmond Hill as well as Scarborough areas. Many may think that driving in downtown Toronto is going to boost the insurance premiums. In fact, it can turn out to do be the opposite. It is because there is more pedestrian traffic on the down the town core.  There are many people that use public transit or ride bikes. It creates a smaller risk for collisions.

It is important to note that there are more expensive areas than others. Each year the insurance companies may form a different viewpoint. It is because statistics change. For them to stay on par with their premiums they have to be aware of these changes.

What Are The Area Factors That Are Considered?


When the insurance company is looking for a specific neighbourhood, they have a couple of things that they will keep in mind. Things that are important to them. Some of the factors they will look at is the driving patterns. In respect to the amount of driving done. It is as it applies to specific areas. They will also look at the number of collisions that take place in a specific area.

To simplify looking at data the insurance companies look at the postal codes. They use this as their metric for collecting the rest of the data as it pertains to it. The postal code pertains to where the vehicle is going to be parked during the evening hours. It’s assumed that the car is not used much of the time during this span.

What Makes Some Neighbourhoods Cheaper?

Insurance companies will determine in a cheap neighbourhood is what public transit is like. It may be easy access and statistics may show that a lot of people do a lot of walking in the area. It is a plus for a reduction in premiums.

Can I Lie About My Address For Insurance Purposes?


Some individuals are aware that a specific neighbourhood is going to hike their insurance. They may try to use another address. They may do this for the purposes of getting cheaper car insurance. It is not a wise thing to do for several reasons.

They will give the wrong address on purpose. It is a misrepresentation. It is done for the purposes of gaining an advantage. The advantage, in this case, is lower premiums.

The repercussions that can come with this are not something that nobody wants to deal with. What can happen is the policy is cancelled. It won’t be a simple matter of going to another insurance company to get re-insured. The cancellation of the policy will show on the driving record. Other insurance companies will frown upon this.

If one ends up in an accident or needs to make a claim hiding the bogus address can be quite a challenge. The chances are it will come out at some point. Which will mean that the claim is voided.

Insurance companies are tired of fraud and misrepresentation. They could decide to make an example of someone and have them charged.

Insurance companies rely on all types of data to help them with their pricing. They are not going to be lax in finding ways to validate their clients’ addresses. Some insurance companies may be more active in doing this than others. But they all have the opportunity to do so. So, they are not going to jeopardize themselves in any way.

Offset The Increased Premiums

One could consider moving to a cheaper location. There are other viable steps to decrease the cost of the insurance. One of the most effective ways is to make sure the driving record remains clean. Becoming aware of what can be on your driving record is useful.  Knowing what can affect it negatively will help to avoid costly mistakes. A clean driving record goes a long way in helping to get discounted premiums.

Over and above this do some research. Do this to see what various insurance companies are offering. By way of discounts and incentives. A driver should not make the mistake of thinking that all insurance companies are the same. They are in a competitive business and will try to outdo each other to get a driver’s business.

Drivers need to take more advantage of this. An easy way to do this is to get some insurance quotes. Then research the quotes further. Do this to get extra cost savings on the insurance price that is quoted. Being aware of what the discounts are allowed one to asked more detailed questions. An informed decision when choosing insurance can result in some excellent savings. It takes very little time to do a good job shopping for insurance.

About the Author: Ashley Miller

Ashley is an insurance content professional and very knowledgeable on all related subjects. Ashley has over 12 years of insurance content writing experience working with various insurance companies throughout her career.