Councillor calls for ban on geographic profiling

Your address alone can either increase or decrease the amount you pay for car insurance.

When buying insurance you are judged on things like age, experience and your driving record; but you are also judged on something else. Geographic profiling is used by police to find the location of criminal offenders, but it is also used by insurance companies to identify locations where the risk of accidents is higher.

This is included in your personal profile as a driver and along with the amount of coverage you purchase, your deductible, and the insurance company you choose, can affect how much you pay.

Coun. Michelle Berardinetti is asking City Council to prevent insurance companies from using geographic profiling in coming up with insurance rates and premiums. She was unavailable for comment.

Jason Chapman constituent assistant to Berardinetti said the councillor passionately believes insurance rates should be based solely on a driver’s record and not where the driver lives.

“This all came about because we heard from so many residents about this issue. They had called around to friends that lived in the city of Toronto versus the old city of Scarborough and they contacted Michelle and she’s been passionate about this for years,” Chapman said. “Toronto is so transient that it doesn’t matter what your postal code is – it should not affect the insurance rate that you pay. You should pay solely based on how good of a driver you are.”

Chapman said safe drivers should not have to pay more for other drivers to have lower premiums.

“Hopefully it means that safe drivers pay lower insurance rates and unsafe drivers pay higher insurance premiums all based on their age, their driving records and their experience,” Chapman said. “But it should not mean that people who are paying less right now because they are living within the city of Toronto should pay more to subsidize people who were paying more before because if you are a safe driver you should be paying what you were paying all along.”

Pete Karageorgos, media representative for The Insurance Bureau of Canada, said it’s only fair for all of Ontario to have balanced insurance rates based on claims and premiums.

“Insurance rates consider the cost trends in prior years to set future rates. For example, in the GTA in 2010 premiums paid by drivers to insurers was $3.56 billion and insurers paid GTA drivers back $4.27 billion in claims,” Karageorgos said. “In the GTA, claims payouts were $700 million higher than premiums. Without territories the costs would still need to be spread among drivers, and this could result in drivers elsewhere in Ontario paying more.”

Karageorgos said he believes Berardinetti’s motion to ban geographic profiling for car insurance rates is misinformed.

“I have contacted her office to discuss her concerns, but to date I have not received a reply. As manager of consumer and industry relations for the Insurance Bureau of Canada our mandate is to assist consumers, such as the councillor to assist with questions related to home, auto and business insurance.”

Karageorgos said that customers should research factors affecting their insurance premiums before purchasing.

“The key factors an insurance customer should look at when shopping for insurance is their own personal driving record, and that means claims and convictions,” Karageorgos said. “By having a clean record they will be in a position to qualify for best rates available. The driving records of others in the household are also considered – and this is asked for in the application for insurance.