You probably don't know -- location not only affects home prices but also your car insurance rate!

We just moved from Montreal to Toronto. Everything so far is fine. The life style and culture may not be as different as we would imagine although people do speak different languages and dress a little bit differently (I would say Montrealers are generally more à la mode..). The only thing freaking us out is the car insurance.

I don't know why, but the car insurance rate here is way way way more expensive than that in Quebec. For same coverage, same car, I have to pay around four times more than I used to pay in Quebec. I really had a hard time to accept the offer...Since it was so expensive, I tried to consult my insurance agent to see if there is any way to reduce the rate. One possible way is, surprisingly, to choose a right place to live.

He showed me how living locations could change the premium by keying different postal codes into their system. For example, I can get a much cheaper rate if I use a postal code for Waterloo instead of Toronto. It's reasonable since there are not as many cars in Waterloo as in Toronto. Fewer cars means lower possibility of accidents and, therefore, lower insurance rates. However, the variation of insurance rate can still be noticeable even for locations within Toronto. I am in North York. I could save more than 10% if I live in the downtown Toronto. He pointed out that people could generally pay less if they live on Yonge street (up to Yonge and Finch). If I am willing to move 5 km west to Yonge Street, I could still save 5~8 %. 8% may not sound like a big discount, but it is not a negligible discount for me since my annual insurance premium is more than 3000 CAD. If I move north to Markham, I could save some money, but not much. But if I move to Scarborough or Jane and Finch region, my rates will go up.

He didn't explain why, but I think it's all about the location. For people with access to public transit (downtown, or along Yonge Street up to Finch), they generally rely more on public transit rather than on driving. So, insurance is cheaper. Since insurance company needs to consider all factors that may damage your car, they charge you more if you live in a relatively unsafe area. Maybe it's not always true, but it does look like that the location does matter! If you are a home owner, you probably can not do anything about it. If you are about to buy your new home or you are renters, maybe you could consider this when choosing your next dwelling.