Does where I live affect my car insurance premium?

When shopping for car insurance, you’ll need to answer a series of questions so the insurer can measure the risk and set your premium accordingly. Will where you live have an impact on that premium? Read on to learn more.

Different locations, different levels of risk

The short answer is yes, where you live will have a direct impact on your car insurance premium. The reason is quite simple: different locations have different levels of risk. This is why car insurance can be more expensive in big cities than in some remote regions.

Important note: When we say “region,” we don’t just mean an administrative region. We’re talking about all risk factors that can affect your car insurance premium, like a city’s sociopolitical situation, municipal bylaws, recorded loss rates, traffic on the roads, and so on.

When you’re shopping around for insurance, it’s completely normal for insurers to ask where you live. For example, if you live in a big city like Montréal where car theft is more frequent, your insurer will consider this when setting your premium.

The same goes for more remote regions, but the risk factors will be different. These can include the type of roads you’re driving on, whether the area is flood-prone or unstable, whether collisions with animals are more frequent, etc. 

How do insurers use these factors?

If you live in a city with lots of risk factors, will your insurer hike up your car insurance premium? Not necessarily. Remember that where you live is only one of the things the insurer will look at. 

To determine your car insurance premium, the insurer will also consider the age of the drivers, where the vehicle will mainly be used, how it will be used, your credit score, your driving and claims records, the make and model of your car, your insurance policy coverage, and more.

If the insurer determines that the risk is low for these other factors, it could offset any higher risks due to where you live. The insurer may even offer you a premium discount if, for example, you have a tracking system installed on your vehicle.

If you’re thinking of moving, you can find out in advance whether the place you’d like to move to is considered higher risk compared to other parts of the province. Groupement des assureurs automobiles (GAA) has statistics that show how the average premium varies according to the number and frequency of claims recorded in each region. 

According to these 2021 statistics, the average insurance premium is highest in Northern Québec at $1,217. The Montréal Urban Community (centre and east) ranks second in Québec with an average of $958, even though it has the highest number of claims (63,346) and the highest claims frequency (11.87%).

The GAA statistics show that lots of things can affect a region’s risk factors and have an impact on car insurance premiums.

We’re THERE to answer your questions!

It’s very important to be honest and transparent with your insurer when requesting a quote for car insurance. Your insurer needs accurate information to be able to offer you the right car insurance premium for your situation, whether you live in the city or out in the country, are a primary or secondary driver, or have a stellar or less-than-perfect driving record. That way, you’ll have the right coverage in the event of a claim.

Want to know more about your car insurance and the coverage you need? Our damage insurance representatives are THERE to answer all your questions. Contact your mutual using our locator tool at the top of the page or request a car insurance quote online today!