Ontario’s New Democrats say auto insurance companies are charging lower income drivers higher premiums because of where they live.
Provincial NDP Leader Andrea Horwath and the party’s Consumer Affairs Critic Jagmeet Singh looked at auto insurance quotes for a forty-year old driver with a “spotless” record and driving a subcompact car. Based on the lowest quotes available, they found that the fictitious driver living in Toronto’s lower-income Jane-Finch area would have to pay $2,500 per year to insure the car. In the more affluent Lawrence Park area, the same driver and same car would pay about $1,150.
“When people are paying more to insure their car than they are to keep it on the road, it’s time for something to change,” said Horwath. “People facing tough times need real protection and that just isn’t happening.”
“Two people buy the same product but the person living in a modest income, high immigrant area pays twice as much. We wouldn’t accept this in any other business,” said Singh. “We need change that puts everyday drivers first.”
The Financial Services Commission of Ontario (FSCO) says that where a driver lives can have an impact on auto insurance premiums. “Auto insurance rates are generally higher in larger urban centres. This is because there are a greater number of vehicles on the road, and the chances of getting into an accident are higher. Also, more vehicles are stolen in urban areas,” the regulator writes on its website.
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