How your Location Affects the Cost of your Insurance

There’s a lot of change to navigate when you move to a new neighbourhood, from finding the best route to work to getting to know your local grocery store. But did you know that moving could also mean a change in your home and car insurance rates? Even moving from one subdivision to another within the same area could lead to an increase or decrease in your premiums. Here are some of the reasons your insurance costs might change when you move.

How does your location affect your home insurance premium?

These factors could have an impact on the cost of your home insurance:

• The age of your home: Older neighbourhoods have older sewer systems, which could potentially put you at higher risk for a sewer backup. Houses in older neighbourhoods may also have out-of-date wiring and plumbing systems, which could increase your chances of an electrical fire or plumbing issues. Moving to an older neighbourhood might lead to an increase in your home insurance premium.
• Proximity of fire services: The type of fire services in your area (i.e., volunteer vs. paid firefighters), as well as your home’s proximity to the nearest fire station and fire hydrant could have an impact on your home insurance premium. In the event of a fire, the longer the response time, the worse the damage — and the larger your insurance claim — is likely to be.
• Environmental considerations: Depending on where you live, you may be at greater risk for certain types of severe weather events. For example, hail is more common in Alberta than in other areas of Canada, while hurricanes are more common in the Atlantic provinces. If you live in a location that is prone to potentially damaging weather events, your home insurance premium may be higher.
• Your chances of experiencing a flood: The closer you live to a body of water, the greater your chances of experiencing flooding. This increased risk could affect your eligibility for certain coverages (like overland water and sewer backup coverage), as well as the cost of your home insurance coverage.

How does your location affect your car insurance premium?

These factors could have an impact on the cost of your car insurance:

• Traffic patterns in your area: The more cars there are on the road and the greater the number of intersections, the more likely you are to be involved in a collision at some point. So, if you live in a highly populated urban area with more traffic, you’re likely to pay more for car insurance.
• A change in the length of your commute to work. Spending more time on the road means there’s more opportunity for you to be involved in a collision. If you move to a different neighbourhood and have a longer commute to work than you did before, your car insurance premium could increase.
• Your risk of experiencing car theft. If your area is known to have a higher frequency of car theft claims, you may pay more for car insurance than someone in an area with a lower risk of experiencing theft. The good news is, installing an after-market security system or anti-theft device in your vehicle could qualify you for an insurance discount.
• Provincial insurance regulation. Car insurance is regulated at the provincial level, meaning each province has its own rules when it comes to pricing, including rules about how much flexibility there can be in rates across the province. Each insurer has to have its rates approved by the regulatory bodies in the provinces it serves — and the more heavily regulated the province, the less flexibility there is in pricing. Moving to a province with different rules may lead to a change in your car insurance premiums.

Do you have to update your insurance policies when you move?

Yes, you have to let your insurance broker know as soon as you move (or in advance) so they can make sure your coverage is up to date. Moving is considered a material change in risk, so it needs to be disclosed right away. If you don’t let your insurer know you’ve moved, you risk your coverage being cancelled.

While your location does have a direct impact on your insurance rates, it’s only one of many factors that goes into calculating your premiums. Other factors that affect your home insurance premium include your home’s heating, plumbing, and electrical systems, the age of your home, the condition of your roof, and whether or not you have a sump pump or backwater valve. Other factors that affect your car insurance premium include your driving habits, the length of your commute, and statistical data about your vehicle.

If you have questions, reach out to us today.