A man from Ontario has expressed frustration over the recent rise in his auto insurance premiums resulting from a change in his postal code, even though he did not actually change his address.
David Neale, who lives in a country property north of Orangeville, explained to CTV News Toronto that the change happened when Canada Post decided to sort his mail to a facility in downtown Orangeville in 2013, switching his postal code to the one that represents the sorting facility, although his address remains unchanged.
According to the news outlet, Canada Post has changed postal codes in the past, resulting in some auto insurance companies to push up rates. Insurers, however, are not supposed to increase premiums if their clients did not physically move.
Neale, who along with his wife owns four cars, said that he has been overcharged on car insurance several times since the change but was able to get the charges reversed. Their insurer, however, recently informed them that future charges will be based on the Orangeville postal code.
“Starting with my renewal, which would be in February of 2022, all my cars are going to be in Territory 22 or as I would say, the sorting facility,” he said.
The Financial Services Regulatory Authority of Ontario (FSRA) told CTV News Toronto that “insurers are not allowed to use a new postal code to re-rate vehicles if the customer hasn’t physically moved from their current address.”
“With respect to auto insurance rating territories and postal code changes by Canada Post, the bulletin issued in 2006 still remains current,” the agency said. “FSRA’s expectation is that insurers are adjusting their systems to ensure that customers are being rated based on the territory they live in and not the territory their postal code puts them in.”
“If errors do occur, it is the insurer’s responsibility to ensure that the error is amended and that their customers are being treated fairly and being charged the correct premium,” it added.
Meanwhile, a spokesperson from Intact Insurance, Neale’s insurer, told CTV News Toronto that they base their insurance premiums on “a risk profile and usage determined by a combination of factors, including type of vehicle and safety rating, driving record, mileage, where the car is driven, where you live, age of driver, type of coverage, and the deductible.”
“We encourage customers to work with their broker if they have questions or concerns about their premiums,” the company added. “Intact has been working closely with the customer and the customer’s broker to address their concerns.”
In the end, the insurer gave Neale a refund for the almost $300 in overcharged premiums on his Porsche and told him that he should not see increases on his other vehicle’s premiums moving forward.
