Ontario premier calls out postal code-based auto insurance premium pricing

Official says the practice is "unfair," and has promised insurance reform

Ontario premier calls out postal code-based auto insurance premium pricing

Motor & Fleet

By Lyle Adriano

Last week, Ontario Premier Doug Ford called out the practice of setting auto insurance rates based on customers’ postal codes, calling it “unfair,” while promising reform.

During a press conference on Thursday, Ford hinted that the government will be acting on the issue soon.

"I know we’re working on a plan for insurance companies, as far as I’m concerned, that’s totally unfair for the people of Brampton, of Scarborough, they're going after these people based on their postal code,” the premier said.

“That’s going to come to an end real quick. They have to treat people fairly.”

The premier’s statements come as the provincial government has recently been implementing driver-friendly policies, such as waiving license plate renewal fees, removing tolls from highways, and reducing gas tax, CTV News reported.

Ford also previously promised in April that the government would tackle insurance fraud, create more insurance choices for customers, and enhance fairness in the system, as part of Ontario’s plan for its provincial budget. All these proposals were met with approval by the Insurance Bureau of Canada.

The premier did not set any timeline for when Ontario would tackle the issue of postal code pricing. But experts believe that the move could benefit some motorists.

RateHub director of insurance Matt Hands told CTV News that it “doesn’t make sense that someone with a clean driving record has to pay more because they live in a certain area.” He also noted that changing the province’s insurance system would take time and warned that while some drivers paying higher rates could get a decrease, other drivers may see their rates increase.

"They are going to have to spread the risk so it might mean that people who have been paying a lower rate in say London or Ottawa might see an increase to help offset the decreases in the other areas because insurance is all about balancing the risk,” said Hands.

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