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article imageHow location impacts car insurance rates and what to do about it

Living in a big city, for example, can increase the possibility of accidents or theft.
Looking at Canada, the most expensive provinces for annual insurance premiums may not immediately surprise you, but the other four might.
The top five most expensive provinces for car insurance, based on average premium per year, are:
• Ontario ($1,878)
• Alberta ($1,476)
• New Brunswick ($1,123)
• British Columbia ($1.113)
• Saskatchewan ($1.049)
Part of the reason why Ontario has the highest average auto insurance premiums is due to the incidence of insurance fraud, says a report from the Fraser Institute.
“Ontario recorded the highest premium that comes as a result of higher claims costs per vehicle stemming from high levels of insurance fraud and relatively severe regulations in rate-setting as well as mandatory minimum liability and accident benefits laws,” says Neil Mohindra, director of the institute’s Centre for Financial Policy Studies, in a 2011 report.
And little has changed in the two years since.
Premiums across Ontario vary region to region. As can be expected, rates are highest in the Greater Toronto Area, which includes Toronto, Markham, Vaughan, Peel, Mississauga and Durham Region. Premiums drop sharply the further north you move away from southern Ontario.
Some of the Ontario regions with the highest insurance rates include:
• Greater Toronto Area
• Sault Ste. Marie
• Windsor-Essex
• Guelph
• Thunder Bay & North Bay
• Niagara Falls
Ontario Finance Minister Charles Sousa says the provincial government recognizes auto insurance premiums are “much lower” in the rest of Canada, and measures are being taken to bring auto insurance premiums down. In the province’s latest budget, plans were set in motion to bring rates down by as much as 15 percent.
“I acknowledge that costs in Ontario are high,” he Sousa told says. “We are taking steps to find ways to get (costs) reduced so we can make it more competitive in Ontario.”
Changes can’t come fast enough in north central and northwestern Ontario, according to New Democratic Party’s Gilles Bisson, MPP for Timmins-James Bay.
“Life is expensive enough in the north without sky-high insurance bills making life even more expensive. When a driver in Manitoba is paying hundreds of dollars less than the same driver would in Ontario, we have a problem,” Bisson told the Sault Star. “Let’s have an open and honest debate about how we get costs under control.”
Most people are unaware or misinformed as to why insurance rates are what they are. People believe new cars are more expensive to insure, for instance: While the value of a vehicle impacts the insurance premium, many of today’s automobiles have safety and security features which actually help bring down the annual premium by using discounts available through many companies.
Drivers aren’t powerless to insurance rates. They can help themselves and lighten their pocketbooks by taking a few simple steps:
• Shop around. Many companies offer varying rates. It pays to ask. A few minutes spent doing research online can also go a long way. Websites such as InsuranceHotline.com are free to use and can present consumers with as many as 30 quotes, all tailored to personal conditions and needs, from insurance companies.
• Look for discounts on your policy. Many drivers are unaware they can get discounts on their policy. For instance, installing tires that are appropriate for each season or having anti-theft devices are just two ways to reduce your insurance premium.
• Increase the deductible. Simply increasing the deductible (especially on collision insurance) a couple of hundred dollars can greatly affect the premium bottom line. Many drivers are hesitant to increase the deductible portion of the insurance policy because they could be scared off by having to pay more up-front in the event of a collision in which they are at fault. However, driving without an at-fault accident for a few years can save a reasonable amount on the premium.
• Combine other policies into one premium, such as auto and home. Some companies offer discounts if two or more policies are bundled together.
In its budget presented in early May, the Ontario government indicated they want to get tough on auto-insurance companies and give residents a break. No time line, however, has been presented as to when this is going to happen. The Insurance Bureau of Canada says the government has to take a leadership role and measures such as those addressed in the latest Ontario budget are a start.
“Introducing reforms to lower costs is the first step in reducing rates for drivers,” said IBC president Don Forgeron, regarding the ideals set out in the Ontario budget. “As we have always said, the auto insurance system needs regular maintenance to insure it is working for consumers.”
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