Home Insurance and Location and Rates
Your guide to how location impacts home insurance rates in Canada
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Freelance writer
What impact does location have on home insurance rates?
Your home insurance can vary depending on where you live. While it’s not the most key factor affecting rates, it will have a significant impact.
Let’s say, for example, your neighbourhood is not served by a municipal fire department with a quick response time. There is a higher risk to you than to a house served by a more reliable fire department.
Some areas are more prone to flooding than others, which could also affect your home insurance rates.
Crime rates, traffic patterns, proximity to other buildings and other issues can affect your premiums.
What makes home insurance providers weary?
Home insurance providers want to know the coverage they are providing is low risk. Some areas come with higher risks and may result in raised rates and/or make it difficult to acquire coverage.
When looking at locations, insurance providers will want to know if you live in a flood-risk zone where frequent damage is a possibility.
Also, high crime areas prone to theft or even vandalism can lead to higher-than-average claims. While it doesn’t happen too frequently, earthquakes and earthquake zones (more likely on the West Coast) can give insurance providers reason to pause when considering coverage in that location.
Some municipalities are served by government-operated fire departments whereas some smaller areas often use volunteer fire departments (and/or emergency services). The response times can vary and so can the resulting damages. This too represents a location issue for insurance providers.
2022 Ontario home insurance rates
Home insurance premiums in Ontario have increased about 10% since fall 2021 compounding homeowners’ cost challenges amid rising interest rates, historic inflation, a labour shortage and increasing incidences of severe weather.
Recent data from RATESDOTCA’s Home Insuramap tool reflects that homeowners in smaller cities continue to pay higher premiums in 2022 while those in larger urban centres enjoy the lowest in the province.
| Rank | City | Estimated 2022 premium | Approximate % change from 2021 |
|---|---|---|---|
| 1. | LaSalle | $2,411 | 15 |
| 2. | Windsor | $2,139.47 | 3 |
| 3. | Hearst | $2,046 | 16 |
| 4. | Foleyet | $2,046 | 3 |
| 5. | South Porcupine | $2,046 | 3 |
| 6. | Keewatin | $2,033 | 18 |
| 7. | Fort Frances | $2,023 | 4 |
| 8. | Val Caron | $2,005 | 9 |
| 9. | Elliot Lake | $2,005 | 15 |
| 10. | Kapuskasing | $2,005 | 1 |
Home insurance trends in Ontario
Trends in Ontario are not what you might think. Residents in the Greater Toronto Area, for example, have the lowest premiums in the province than people in smaller cities. Why?
As of July 2022, home insurance premiums in Ontario increased about 10% since fall 2021. The most significant year-over-year cost increase were for homeowners in Keewatin (18%), in northwestern Ontario, and LaSalle (15%), in southwestern Ontario, according to RATESDOTCA Home Insurance tool. Both areas are prone to flooding which experts believe help account for the increase, among other factors. Rural areas also face higher risks from climate change, such as forest fires and tornados.
LaSalle, which is in the Windsor area, was the most expensive Ontario city for home insurance. In 2022, cross the province, the average was $1,487, whereas Lasalle came in at $2,411.
Crime rates in Ontario are higher in smaller cities and rural regions can also impact rates.
Areas such as Windsor and Timmins, for example, have reported a high concentration of break-ins. In 2018, Windsor experienced a break-in or attempted break-in every four hours. In 2020, Timmins police responded to 295 break and enters, compared to 218 the year before.
Frequently asked questions about location and rates
Does my location affect my homeowner insurance premium?
Yes. Things such as crime rate, climate events or access to emergency services can affect homeowner insurance premiums.
Why do insurance providers look at location when considering their premiums?
Insurance providers are looking to insure people and areas with the lowest risk factors. If an area is determined to be low risk, a provider will more likely provide insurance at a lower price than a home in a high-risk area. This is not the only determining factor but is an important one.
Is there a way to lower the premium if I am in a higher risk location?
Negotiating your deductible can be a good start to lower premiums but also consider upgrades to security and outdoor lighting, as well as making repairs where needed. Proper maintenance can also lower the risks if you live in an area prone to floods or other environmental risks. In addition, installing an auto shut off valve, remote water sensor, and battery operated sump pump can reduce the cost of home insurance.
Joel Kranc, Freelance writer
Joel Kranc is a freelance writer and content provider who has worked with RATESDOTCA since 2019. He holds an MA in political science from the University of Toronto and a film certificate from New York University.
He has been published in and worked for such companies as CNN, Rogers Media, Institutional Investor Magazine, The Globe and Mail, Infrastructure Investor, BenefitsPRO Magazine, Global Finance Magazine, With Intelligence, the CPP Investment Board, Hospitals of Ontario Pension Plan, and many more financial services and industry publications.
He is the author of "Retirement Planning in 8 Easy Steps," which, when released in 2015, was No. 11 on the Publisher's Weekly US Bestseller List for Business and Finance, beating out Mark Cuban's "How to Win at the Sport of Business."
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