New Waterdown postal codes affect insurance rates, warns resident

News Aug 12, 2016 by Mac Christie Flamborough Review

Canada Post’s move to change postal codes in Waterdown from L0R to L8B is having an impact on insurance rates.

Flamborough Centre resident Alistair Brown said he discovered his house insurance was going up due to the postal code change when he renewed it in July.

“I was told that when we renew our car insurance, it would be going up,” he said. Brown said he was told the residents of Flamborough are now considered residents of Hamilton, due to the postal code starting with “L8.”

He noted insurance companies consider that to be a higher risk area than the old L0R postal code, despite the fact that he has not moved.

“I’m going to write to the ombudsman of the insurance company and say, ‘This is ridiculous,’” he said. “Something needs to be done.”

While Brown’s increase in house insurance premium was less than $30 for half the year, he said it’s the principle of the situation that bothers him. “I’d hate to think what the cars are going to be,” he said. “They’ll nail you on that one.”

Don Mather, of the Insurance Bureau of Canada said a postal code change can result in a premium increase.

He explained each insurance company divides Ontario into about 50 territories, which are internally divided by postal codes.

“They’re not all the same,” he said of each company’s divisions. “Allstate might have 52 territories broken down in their way and Aviva might have their 52 territories broken down somewhat differently.

“Within the territories, there’s provision for data based on claims experience by postal code having a bearing on the pricing.”

Mather said if Waterdown’s new postal code is assigned a higher risk rating, based on the insurance company’s data, their rates could increase. However, an insurance company cannot adjust a premium due to a postal code change mid-term, he noted. “If the postal code change is going to result in an increase in premium, it could not take place until the policy renews,” he said.

In terms of recourse, Mather said customers can simply shop around for a lower rate.

Ron Berry, president of Waterdown’s Merit Insurance Brokers, said the company has seen a few clients impacted lately.

He noted Flamborough is a strange case, from a postal code standpoint. “You can go up Brock Road and you’re in Dundas but as soon as you cross (Hwy. 5) you’re in Millgrove,” he said. “You go north of Strabane, basically you’re Puslinch.

“It doesn’t seem to make any sense at all, but every time you do anything in terms of rating, you have a line – either side of that line will seem unfair to the person on the other side of the line.”

Berry thinks the insurance companies likely need a bit of time to analyze where the postal codes are, in relation to the existing risk.

“Years ago, we had one company, we had them come out and I just drove them around,” he said. ‘I said, ‘Here’s where your postal code says these guys have this risk.’”

He noted in that case areas north of Carlisle were considered Hamilton, while south of Carlisle was considered Burlington.

“I said, ‘Does this make sense to you?’” Berry recalled. “They ended up getting that rating sorted out.”

He said while each company has different divisions and rates, he hopes the situation will be resolved in the next six to eight months. He noted the individual insurance brokers can’t override the rates set out by the company.

In the interim, customers should call their broker before changing their postal code to see if it will impact their insurance rates. “You have a year to change it,” Berry said, suggesting residents could wait to change it until after renewal.. “You’re not being unfair anywhere.”

New Waterdown postal codes affect insurance rates, warns resident

News Aug 12, 2016 by Mac Christie Flamborough Review

Canada Post’s move to change postal codes in Waterdown from L0R to L8B is having an impact on insurance rates.

Flamborough Centre resident Alistair Brown said he discovered his house insurance was going up due to the postal code change when he renewed it in July.

“I was told that when we renew our car insurance, it would be going up,” he said. Brown said he was told the residents of Flamborough are now considered residents of Hamilton, due to the postal code starting with “L8.”

He noted insurance companies consider that to be a higher risk area than the old L0R postal code, despite the fact that he has not moved.

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“I’m going to write to the ombudsman of the insurance company and say, ‘This is ridiculous,’” he said. “Something needs to be done.”

While Brown’s increase in house insurance premium was less than $30 for half the year, he said it’s the principle of the situation that bothers him. “I’d hate to think what the cars are going to be,” he said. “They’ll nail you on that one.”

Don Mather, of the Insurance Bureau of Canada said a postal code change can result in a premium increase.

He explained each insurance company divides Ontario into about 50 territories, which are internally divided by postal codes.

“They’re not all the same,” he said of each company’s divisions. “Allstate might have 52 territories broken down in their way and Aviva might have their 52 territories broken down somewhat differently.

“Within the territories, there’s provision for data based on claims experience by postal code having a bearing on the pricing.”

Mather said if Waterdown’s new postal code is assigned a higher risk rating, based on the insurance company’s data, their rates could increase. However, an insurance company cannot adjust a premium due to a postal code change mid-term, he noted. “If the postal code change is going to result in an increase in premium, it could not take place until the policy renews,” he said.

In terms of recourse, Mather said customers can simply shop around for a lower rate.

Ron Berry, president of Waterdown’s Merit Insurance Brokers, said the company has seen a few clients impacted lately.

He noted Flamborough is a strange case, from a postal code standpoint. “You can go up Brock Road and you’re in Dundas but as soon as you cross (Hwy. 5) you’re in Millgrove,” he said. “You go north of Strabane, basically you’re Puslinch.

“It doesn’t seem to make any sense at all, but every time you do anything in terms of rating, you have a line – either side of that line will seem unfair to the person on the other side of the line.”

Berry thinks the insurance companies likely need a bit of time to analyze where the postal codes are, in relation to the existing risk.

“Years ago, we had one company, we had them come out and I just drove them around,” he said. ‘I said, ‘Here’s where your postal code says these guys have this risk.’”

He noted in that case areas north of Carlisle were considered Hamilton, while south of Carlisle was considered Burlington.

“I said, ‘Does this make sense to you?’” Berry recalled. “They ended up getting that rating sorted out.”

He said while each company has different divisions and rates, he hopes the situation will be resolved in the next six to eight months. He noted the individual insurance brokers can’t override the rates set out by the company.

In the interim, customers should call their broker before changing their postal code to see if it will impact their insurance rates. “You have a year to change it,” Berry said, suggesting residents could wait to change it until after renewal.. “You’re not being unfair anywhere.”

New Waterdown postal codes affect insurance rates, warns resident

News Aug 12, 2016 by Mac Christie Flamborough Review

Canada Post’s move to change postal codes in Waterdown from L0R to L8B is having an impact on insurance rates.

Flamborough Centre resident Alistair Brown said he discovered his house insurance was going up due to the postal code change when he renewed it in July.

“I was told that when we renew our car insurance, it would be going up,” he said. Brown said he was told the residents of Flamborough are now considered residents of Hamilton, due to the postal code starting with “L8.”

He noted insurance companies consider that to be a higher risk area than the old L0R postal code, despite the fact that he has not moved.

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“I’m going to write to the ombudsman of the insurance company and say, ‘This is ridiculous,’” he said. “Something needs to be done.”

While Brown’s increase in house insurance premium was less than $30 for half the year, he said it’s the principle of the situation that bothers him. “I’d hate to think what the cars are going to be,” he said. “They’ll nail you on that one.”

Don Mather, of the Insurance Bureau of Canada said a postal code change can result in a premium increase.

He explained each insurance company divides Ontario into about 50 territories, which are internally divided by postal codes.

“They’re not all the same,” he said of each company’s divisions. “Allstate might have 52 territories broken down in their way and Aviva might have their 52 territories broken down somewhat differently.

“Within the territories, there’s provision for data based on claims experience by postal code having a bearing on the pricing.”

Mather said if Waterdown’s new postal code is assigned a higher risk rating, based on the insurance company’s data, their rates could increase. However, an insurance company cannot adjust a premium due to a postal code change mid-term, he noted. “If the postal code change is going to result in an increase in premium, it could not take place until the policy renews,” he said.

In terms of recourse, Mather said customers can simply shop around for a lower rate.

Ron Berry, president of Waterdown’s Merit Insurance Brokers, said the company has seen a few clients impacted lately.

He noted Flamborough is a strange case, from a postal code standpoint. “You can go up Brock Road and you’re in Dundas but as soon as you cross (Hwy. 5) you’re in Millgrove,” he said. “You go north of Strabane, basically you’re Puslinch.

“It doesn’t seem to make any sense at all, but every time you do anything in terms of rating, you have a line – either side of that line will seem unfair to the person on the other side of the line.”

Berry thinks the insurance companies likely need a bit of time to analyze where the postal codes are, in relation to the existing risk.

“Years ago, we had one company, we had them come out and I just drove them around,” he said. ‘I said, ‘Here’s where your postal code says these guys have this risk.’”

He noted in that case areas north of Carlisle were considered Hamilton, while south of Carlisle was considered Burlington.

“I said, ‘Does this make sense to you?’” Berry recalled. “They ended up getting that rating sorted out.”

He said while each company has different divisions and rates, he hopes the situation will be resolved in the next six to eight months. He noted the individual insurance brokers can’t override the rates set out by the company.

In the interim, customers should call their broker before changing their postal code to see if it will impact their insurance rates. “You have a year to change it,” Berry said, suggesting residents could wait to change it until after renewal.. “You’re not being unfair anywhere.”