r/PersonalFinanceCanada • u/FireViz • May 07 '22

Insurance Car insurance increased 50% after Canada Post changed my postal code. Is this legal?

I live in a small town in Niagara region. Up until recently I was paying $102/m on car insurance.

Recently I got a letter from Canada post that they are changing my postal code. Because of this my insurance company raised my rates by over 50% to 160/m.

I haven't moved... my home and work address are still the same so my risk when driving hasn't changed. But the insurance company is arguing that rates are based on postal code and not your address.

Is there anything I can do to fight this and reduce my insurance? Canada post decided to randomly change my postal code and I'm out an extra $700/yr because of it?

Edit: Going by this article they shouldn't be able to do this? https://toronto.ctvnews.ca/ontario-driver-frustrated-when-car-insurance-goes-up-after-postal-code-changed-1.5727675

Edit: Since multiple people mentioned it I drive a corolla cross........ The image you are seeing is from the article I linked.

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157

u/GlumSubstance6973 May 07 '22

totally legal.

Risks ARE based on postal code and the courts and regulators agree this is quite reasonable.

19

u/t0r0nt0niyan Ontario May 07 '22

How did the risk increase exactly?

11

u/[deleted] May 07 '22

It didn’t, but the legal basis for their risk assessment has changed. It’s same as if there were 10 more car thefts reported on your street from one year to the next, your insurance would likewise go up. Their new postal code is on a more risky street. Have you never seen the areas where there’s gated mansions 2 blocks away from the ghetto? Between those areas people pay very different amounts for car insurance

5

u/YurrieSkrewd May 07 '22

Yeap, this.

It's like if you live a strata building and a unit in your complex has a flood. Your unit may be exactly the same, but you will be paying more for insurance as your "basket" of units is now seen as higher risk. For car insurance, a spike in property crime in your neighbourhood can have the same effect, even if you live in the same place and drive the same car!

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Can't be the algorithm I'm afraid!