Does my postal code affect the cost of my insurance?
Did you know that your postal code affects your insurance? It’s weird but it’s true. Depending on where you live, your auto and property insurance rates vary slightly. Below, we put four Greater Toronto Area postal codes to the test to see how different our quotes would be.
What your postal code means for insurance providers
Your postal code betrays your neighbourhood, and the area you live in is associated with a myriad of things such as:
- Car theft
- Break and enters
- Car collisions
- Bike lanes
- School zones
- Vandalism
- Construction
- Population density
- Traffic
- General crime
Insurance companies look at how many claims are filed per postal code, and set rates according to your risk. Your location matters, a lot!
We put Toronto area postal codes to the test for both auto and property insurance. What's the first thing you'll be asked before you get an insurance quote? You'll be asked to provide your postal code, of course.
Test parameters
We used a tester-dummy named Wendy, who we made as low-risk as possible. Next, we used various quoter tools on the internet to see how different our auto insurance results would be if we kept the individual the same, but changed her location. We only did each test once to see what numbers we would get; it would definitely change if you decided to shop around. Check it out below.
Auto insurance test
For the auto-test, we gave Wendy Williams 45 years of age, a perfect driving history, a new Honda Civic four-door, a wedding ring, winter tires, and low mileage needs. We didn’t give her any comprehensive or collision coverage nor did we consent to a credit check.
North GTA (North York)
Yonge St. and Finch Ave E., M2M 4L9
Smart Coverage top quote: $92.75/month or $1,113/year
West GTA (Etobicoke)
The Queensway and Kipling Ave, M8Z 1S1
Smart Coverage top quote: $84.17/month or $1,010/year
South GTA (Downtown)
Spadina Ave and Lakeshore Blvd W., M5J 2G8
Smart Coverage top quote: $78.58/month or $943/year
East GTA (Scarborough)
Brimley Rd. and Lawrence Ave E., M1J 1C9
Smart Coverage top quote: $339.33/month or $4,072/year
Results
As you can see, there's quite a difference in Wendy's top quotes. One person might think that living downtown increases your auto insurance, seeing as there's usually a higher propensity for crime and vandalism, but Scarborough actually has the most expensive rate here. Perhaps it's all the commuting, multi-lane traffic and car collisions reported in Scartown that makes their quote over 3x higher in some cases. Harsh!
Property test
Next, Wendy needed some renters insurance, of course! Keep in mind that renters insurance is the cheapest form of property insurance in most cases. Toronto is one of the most expensive cities for property insurance in Canada for a variety of reasons, but renters insurance is usually affordable wherever you reside.
We gave Wendy a high-rise apartment in a concrete building that was only about 20 years old in four different parts of the city. We ran into a tiny roadblock with the initial quote tool we were using and had to switch it up for this one. We still got relatively different quotes.
North GTA (North York)
Yonge St. and Finch Ave E., M2M 4L9
Top quote: $16.33/month or $196/year,
West GTA (Etobicoke)
The Queensway and Kipling Ave, M8Z 1S1
Top quote: $15.08/month or $181/year
South GTA (Downtown)
Spadina Ave and Lakeshore Blvd W., M5J 2G8
Top quote: $18.08/month or $217/year
East GTA (Scarborough)
Brimley Rd. and Lawrence Ave E., M1J 1C9
Top quote: $18.25/month or $219/year