Postcode discrimination: Ontario auditor general highlights auto insurance disparities

Click to play video: 'Ontario’s AG finds higher auto insurance premiums based on where you live'
Ontario’s AG finds higher auto insurance premiums based on where you live
WATCH ABOVE: A report by Ontario's auditor general on auto insurance premiums, underlining that where you live could mean a difference in thousands of dollars of auto insurance premiums, has raised questions. Matthew Bingley reports. – Nov 30, 2022

Where you choose to live could be costing you thousands of dollars in auto insurance premiums, Ontario’s auditor general has found, leading to a renewed push to eliminate postal code discrimination in the province.

In her annual value-for-money audit, Auditor General Bonnie Lysyk found that a Brampton resident who drives the exact same vehicle as a London resident would pay more than twice as much to insure the car based on postal code.

In the example provided by the auditor, the London resident would pay $1,200 per year for auto insurance, while someone driving the same car in Brampton would pay $3,350.

The audit also found the average auto insurance premium increased almost 14 per cent between 2017 and 2021 leading to the “highest private passenger automobile insurance premiums in Canada.”

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It found that neither the Ministry of Finance nor the Financial Services Regulatory Authority of Ontario (FSRA) had “done significant work to address past recommendations to reduce costs” for drivers in Ontario.

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Ending the practice of postal code discrimination has been a long-standing demand by the Ontario NDP, which has repeatedly tabled legislation to eliminate the policy.

NDP MPP Tom Rakocevic reintroduced a bill in August that would “prevent residents of the Greater Toronto Area from paying different rates for automobile insurance based solely on the municipality or area in which they reside. It’s the third time that the party has introduced such legislation.

The bill has yet to move past first reading in the Ontario Legislature, the rules of which are controlled by the government party.

Lysyk’s 2022 report outlined a number of actions that the AG believes could help reduce rates, such as allowing the province to directly pay for auto-accident injuries, rather than insurance-funded cash settlements for people who are injured and then seek their own treatment.

The auditor general also suggested Ontario could license repair shops “to protect consumers against poor repairs and fraud.”

— with files from Global News’ Ryan Rocca

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