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How location affects car insurance premiums

Local accidents, crime rates and mandatory coverage play into premium costs.


Fact checked

Location is one of the most significant factors that determine your car insurance premium. For one, the number of car accidents your insurance company sees around your address could raise or lower your rates. But you’ll find a number of other characteristics that could leave you paying more too.

How does my address affect car insurance premiums?

Urban areas are more densely populated than rural ones with busier roads, more car accidents and a higher likelihood of making claims. These factors increase premiums in major cities and surrounding addresses.

However, living rural could mean you drive longer distances, see less road upkeep and risk losing a car to bushfires or animal collisions.

Overall, you should see lower premiums in rural areas, but it depends on the factors surrounding your specific address.

How does my city and province or territory impact car insurance costs?

The province or territory where you live in has a significant impact on the price of your car insurance. For example, car insurance is most expensive in British Columbia, while Quebec tends to have the lowest prices overall.

It’s probably not worth moving to another province for lower car insurance premiums. But you can know what to expect on a regional and local level.

  • Provincial or territorial requirements. Your province or territory manages drivers’ minimum requirements, which means costs can vary widely across the nation.
  • Population. A higher population means more cars on the road, more chance of having an accident and higher premiums.
  • Number of claims. The more claims originating from your area, the higher you can expect your premiums to be.
  • Risk. Areas with higher occurrences of car theft, vandalism or extreme weather conditions pose a greater threat and may have higher premiums. For example, rural areas may risk more animal collisions.
  • Competition. Areas with more competing insurance companies might have lower prices.

Annual car insurance rates by province and territory

How do car insurance companies use my address?

Insurance companies use your address to apply specific risk data based on that exact location and postal code. This is based on the odds of making a claim and can be affected by countless factors like narrow roads or dangerous intersections. Some of the local factors used to determine risk:

  • Where you park. You can pay less for car insurance if you park in an enclosed garage or carport overnight, instead of on the street. Addresses without a garage have higher car insurance premiums.
  • Weather. Rain, snow, hail and other bad weather can cause car accidents, so areas with extreme weather conditions can see higher insurance rates.
  • Crime. While optional comprehensive car insurance coverage includes coverage for theft, the crime rate in your neighborhood will impact your premiums.
  • Population density. The more crowded your area and the more cars on the road, the higher the car insurance.
  • Road maintenance. Poor road conditions are responsible for many accidents, so having better-maintained roads can lower premiums.

How do I get cheap insurance no matter my address?

The golden rule of car insurance prices is that your odds of making a claim determine your premiums. Fortunately, you don’t need to move to save on car insurance.

If you live in a high-risk area, usage-based car insurance is your best bet for cheaper rates. You can show your insurer you’re a safe driver with an app that measures how you drive. This helps you minimize the perceived risks and get a rate based on your actual driving habits. Safe, low-mileage drivers could save a lot with usage-based insurance.

Bottom line

There are many other factors that affect car insurance prices besides location. It can be worth looking over them for other ways to cut your car insurance premiums. Once you’ve done that, getting low prices is largely about being informed and comparing policies side by side.

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