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The Effects on Your Insurance Rates When You Move to a Small Town

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The COVID-19 pandemic has brought about a myriad of changes to our world. We’ve changed how we work and do business, how we get around, how we interact with others, and on and on. Really, just about every aspect of how we live our lives has been altered in the last while.

One trend that has emerged during this time is a move away from big cities into smaller towns and rural areas. Apartment living in big cities like Toronto and Ottawa holds less appeal now. Many of us are looking to, if we haven’t already, make moves that will take us to smaller, friendlier communities, less crowded spaces, abundant nature, and living situations that allow for comfortable working from home conditions and more room to live and breathe. Generally speaking, houses and properties in Ontario are cheaper outside of the big metropolis and the farther away you get from the GTA, the less your housing costs should be. Or you will certainly be getting more bang for your buck.

Along with this rosy picture, you might also be thinking that your new idyllic existence will also come with a bonus of lower home insurance rates. Less crime, a cheaper house… this must translate to lower costs, right?

Unfortunately, the answer most likely is no. So let’s get into the realities of home insurance for smaller towns and places out in the country.

Home insurance rates in smaller communities

Let’s take a look at some rate comparisons to get an idea of the difference in home insurance costs for larger cities versus smaller communities.

In this recent article in the Canadian Underwriter, home insurance rates in Toronto are said to be somewhere in the $1,200 – $1,350 range as an average and hovering around $1,000 in other parts of the GTA. By comparison, those living in Sudbury or Windsor-Essex are looking at rates of about $2,000 (source: Home insurance can be more expensive in smaller towns: experts – Canadian Underwriter).

Why the higher costs?

There are several factors that can push home insurance rates higher in the countryside or in smaller towns…Larger properties and larger houses mean more to insure, as well as potentially more types of coverage required.

~ Larger properties and larger houses mean more to insure, as well as potentially more types of coverage required.

~ While a move to the country may be welcomed precisely because of its access to nature, this comes with its own ramifications. Homes and properties in more rural areas have more exposure to natural disasters and other risks from nature. Think flooding, or wind damage from large trees. And with the advent of climate change and the resulting increases in major weather events and other natural disasters, insurers are carefully weighing risks. Metropolises like Toronto have more at their disposal for projects and infrastructure to address risks like flooding. Smaller communities may not have budgets to tackle projects that could help to mitigate these risks.

~ Higher crime rates. Similarly to auto insurance, insurers look to the data they have around claims in your area to set their rates. This may come as a surprise, but often smaller communities suffer from more crime and thus rates are reflect the higher risk.

~ Proximity to a fire hydrant or a fire hall also factors into rates. If you are more removed and it would take longer to put out a fire on your property, then chances are there will be more damage to contend with.

~ Are you looking forward to cozying up to a fire? That cozy fireplace comes with its own costs. Having one in your home will mean higher rates – wood burning stoves need to be maintained properly and are considered a risk in the eyes of an insurer.

~ Given that Windsor in particular is know for a high risk of flooding and high crime rates, it’s no wonder that insuring a home in that region can be so much more expensive than in the GTA.  

What can you do as a home owner to lower rates?

As we’ve discussed many times here on the blog, there are always steps you can take to get cheaper insurance premiums. When it comes to saving on home insurance, doing what you can to protect your home from flooding is an important undertaking, especially sump pumps and backflow valves. If crime is an issue in your area, you could consider installing a security or monitoring device or burglar alarm to help with your rates.

Different insurers will offer different discounts for things like sump pumps or security infrastructure. Speak to your provider or broker to find out the savings that are available to you.

You might also want to check out these resources from the archives:

Silver lining – your auto insurance rates

OK, so your home insurance rates might go up, but how about your auto insurance? Here we can share some good news… depending on where you go you may enjoy cheaper auto insurance rates. If you move to an area where there are less claims (fewer accidents, fewer break-ins etc.) you should see your rates go down. The likelihood of getting in a car accident on the busy streets of Toronto is much higher than it would be in a rural area. Insurers take factors like this into account when setting rates.

Thinking about making the move to a smaller town? Want some more information about how your location affects your insurance rates? Get in touch with one of our insurance specialists today. Looking for an online quote? Head here for home insurance and here for auto insurance.

Looking for cheap insurance in Ontario? Contact us today to learn how we can help!

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