A few days after moving, Steven Baker thought he was being diligent by phoning his insurance company to inform it that his home address had changed.
Once the provider put the new location into the computer, Baker says, he was told his car insurance shot up by about $600 a year — from $1,950 a year to $2,560.
"I was shocked," said Baker. "I asked them why. Nothing had changed. I hadn't had any accidents."
Baker said his provider, TD Insurance, told him the increase was because of his new postal code.
Baker had moved from a side street near Ossington Avenue and College Street to a similar sized road about four kilometres north near St. Clair Avenue and Dufferin Street.
"If you look, the two streets, they're almost identical in terms of the type of neighbourhood and the amount of traffic," said Baker.
Rates depend on area's collision history
Insurance expert Anne Marie Thomas said the reasons behind premiums aren't always easily visible.
"Actuaries look at statistics and instances to determine where accidents happen most frequently," said Thomas. "Where accidents happened historically is likely where they are going to happen in the future."
Steven Baker says his car insurance shot up $600 when he moved three kilometres north. (Steven Baker )
Thomas works for Kanetix.ca, a company that monitors insurance rates and helps consumers compare rates from different providers. Kanetix.ca also has mapped out areas in the Greater Toronto Area by postal code to show where rates are the highest.
CBC News Toronto used Kanetix.ca to compare the rates between Baker's new postal code and his old one.
How Ontario's soaring auto insurance rates could swing the provincial election
For a single 30-year-old with a clean driving record in a Ford Focus, TD's rates went up to $2,565 a year from $1,835. Thomas said there could be numerous factors that cause that increase. The roads may be wider, speed limits higher or there could be more theft in Baker's new area. When Baker asked TD Insurance for an explanation, he said, the person on the phone told him his new location had more intersections.
Baker wants providers to look at driver's history
"I asked him if he could tell me a neighborhood where I could move to where my insurance rates would go down, and he said Front Street," said Baker. "That got me a bit upset because that's all intersections and [Front Street is] much busier than the neighborhood that I moved into."
The downtown section of Front Street near Union Station may seem busier, but Thomas said that congestion leads to less severe accidents, something actuaries take into account.
"We're not going at 60 km/h," said Thomas. "Because of traffic we're going at 20 km/h. If we hit the vehicle in front of us the damage is going to be less."
CBC reached out to TD Insurance with Baker's information and the company confirmed that risk profiles are tied to a person's neighbourhood.
"Even within small geographic distances, claims rates can vary widely due to a number of factors like traffic density, levels of pedestrian traffic and weather exposure," said TD Bank Group spokesperson Crystal Jongeward.
Still, the idea of setting a driver's rate based on their address frustrates Baker, and he's going to start looking into other providers.
"A driver's behaviour and accident record is what they should be looking at. Not where someone happens to be parking their car," said Baker.
The practice of determining premiums based on postal codes has been under scrutiny for a while. Both the NDP and the Liberals are promising to halt it if they're elected next month.
Thomas said that although it sounds like a good idea, she doesn't know how it could work, because "so many facets of an insurance premium are tied to where you live."
