Shop Insurance Canada Discusses Auto Insurance Postal Code Premiums
October 14, 2016 (PRLEAP.COM) Business NewsOctober 14, 2016 - The interesting and somewhat hilarious story of one Toronto resident highlights how auto insurance companies calculate premiums based on location. Sometimes the system is so rigid that it can result in savings or paying a lot more for coverage, through the space of a few blocks. Shop Insurance Canada says this is common practice, but the results can sometimes seem very unfair.
A report in The Star tells how Anita Dermer found out her auto insurance premiums would increase considerably after she moved from North York to Scarborough. The highlight of the situation is that she actually only moved five minutes (4 kilometers) from her previous location. Still, for this small location change, the premium for her 2003 Honda Acura increased by $600 a year.
That is a huge increase considering the Greater Toronto Area is home to the highest car insurance rates in Canada. While other factors can affect a premium, such as driver record, the location change was the only differing factor in Dermer's case. She told The Star that "it seemed blatantly unfair."
Auto insurance industry authority, Shop Insurance Canada, explains that insurance companies calculate premiums with location as one factor. Sometimes the way the automatic systems decide the results can seem unfair.
"The situation shines a spotlight on how insurance providers calculate car insurance based on location. Again, other factors like driving record are included, but even a simple location change can have a profound impact on how much you pay to get your vehicle covered.
Dermer's situation has a thick vein or irony running through it. While the insurer gave her a more affordable premium while she live in North York, her vehicle was in Scarborough for much of the time. It was where she worked, studied, and where her parents live."
Indeed, this calculation on location is not actually something the insurance company decided on a per-customer basis. It is an automatic process that the company's systems will use to assess a customer for a premium. In some cases, such as this, it throws up situations that are almost funny. Indeed, neighbors on the same street could be paying different premiums if they happen to have different postcodes, even if all other criteria was equal.
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About Shop Insurance Canada
Shop Insurance Canada is a Toronto based company that specializes in delivering the best auto insurance products to customers around Ontario and Canada. The online auto insurance quoting tool uses an engine that is easy to use and accurate enough to deliver the best auto insurance quotes from over 25 of Canada's leading providers. Shop Insurance Canada also offers expert advice on the auto insurance industry, as well as guides and news to help customers find the best deal possible.
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