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Alberta has a private auto insurance system that is subject to some regulation. In basic terms, it means drivers buy their coverage from insurance companies, which compete for business, and there are government-imposed rules that dictate how insurance companies can conduct business in the province.
A provincial body, the Automobile Insurance Rate Board (AIRB), establishes guidelines on how insurance companies can rate consumers. Insurance ratings determine how much the company charges a driver for coverage.
AIRB also enforces price caps. The Grid system outlines the most and least an insurance company can charge for basic car insurance. Basic coverage includes third-party liability, accident benefits, and direct compensation property damage. Insurance companies can set prices for optional coverage as they see fit.
The Grid outlines the maximum amount drivers motorists can pay for insurance. As a driver, your rates will go up or down depending on many factors. But they can never exceed the maximum premium outlined on the Grid for a driver with your record.
You can see where you fall on the spectrum by using the Grid rate calculator from AIRB.
Insurers must compare the base premium determined by the grid to the policyholder’s quoted premium and charge the lesser of the two. Only a few Albertans end up paying the Grid rate.
|Third-party liability||Mandatory||Coverage for when you're found responsible for an accident that causes injury or damage to someone else.|
|Accident benefits||Mandatory||Covers the cost of medical care for you and your passengers. Coverage extends to rehabilitation, funeral expenses, death benefits, and income replacement.|
|Direct compensation for property damage (DCPD)||Mandatory||Covers the cost of replacing your vehicle and pays for replacement transportation costs. You receive the benefit if you were not at fault for causing the accident. Partially at-fault drivers may still qualify for DCPD. Their benefit will be proportionate to the percentage of fault allocated to them. There’s no deductible for this coverage, however you can ask one in exchange for a slightly lower premium.|
|Collision||Optional||Will pay to repair or replace your car if it's involved in a collision with an object other than a car. Carries a deductible.|
|Comprehensive||Optional||Will cover damage to your car caused by something other than a collision. Insurable perils include falling objects, vandalism, theft, and fire. Carries a deductible.|
|Specified perils||Optional||Covers the same types of perils as comprehensive insurance. You must specify which ones you want coverage against. Carries a deductible.|
|Comprehensive Cover Limited Glass (SEF 13D)||Endorsement||Reduces the amount of coverage for glass damage in your policy. In return, you get a lower premium.|
|Loss of Use (SEF 20)||Endorsement||Compensation for transportation costs (taxis and public transportation), up to a pre-determined limit. You'll only get this benefit if your vehicle is damaged due to a loss covered by your policy.|
|Legal Liability for Damage to Non-Owned Automobiles (SEF 27)||Endorsement||Extends physical damage coverage (and deductible) to rental cars.|
|Accident Rating Waiver (SEF 39)||Endorsement||Prevents your premium from increasing after an at-fault accident.|
|Limited Waiver of Depreciation (SEF 43R)||Endorsement||This waives depreciation on the repair or replacement of a new vehicle. Only applicable if an insurable peril damages it.|
|Family Protection (SEF 44)||Endorsement||Protects you if you’re involved in a collision with an underinsured or uninsured driver. The Family Protection endorsement will bridge the gap if the costs exceed the other driver’s insurance benefit.|
Your insurance policy will help pay your bills in the aftermath of an accident. But how much can you expect to receive? Before you sign a contract, make sure you know the amount you'll be entitled to. This sum is otherwise known as your policy limit. Insurance policy limits tell you the maximum amount your insurer will pay you if your claim is approved. Each section of your policy will have its own limit. You can increase your limits beyond the standard amounts at extra cost. Here are the limits for a basic auto insurance policy in Alberta.
Mandatory minimum third-party liability:
$50,000 per person per accident with a limit of two years from the date of the accident. For chiropractic care, massage therapy and acupuncture, the limits are $750, $250 and $250, respectively.
Direct property compensation damage:
$50,000 per person per accident with a limit of two years. For chiropractic care, massage therapy and acupuncture, the limits are $750, $250 and $250, respectively.
Funeral expense benefits:
$5,000 per person.
Disability income benefits:
If you’re employed at the time of the accident, you can receive 80% of your gross weekly earnings (maximum $600 per week), for up to 104 weeks. For an unemployed adult, the benefit is $200 per week, for up to 104 weeks.
For a head of household, $10,000 is available plus $2,000 to each surviving dependent after the first survivor, plus $15,000 for the first survivor and $4,000 for each remaining survivor; $15,000 for the death of the spouse of the head of the household and up to $500 for family grief counselling.
Right to sue for pain and suffering?
Yes, but rewards are limited for cases that don’t involve serious impairment.
Right to sue for economic loss in excess of no-fault benefits?
It’s expensive to be a driver in Alberta. Shopping around for the best insurance coverage at the lowest price is more important than ever. Knowing a little about how car insurance works can help you find more savings. RATESDOTCA is here to help. Read on to learn about car insurance in Alberta.
Here's the bottom line. You owe it to yourself to explore all your options before committing to an insurance company. We work with over 50 of Canada’s best insurance providers, showing you their rates side by side. All you have to do is choose the best one.
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The average cost of car insurance in Alberta is $1,514, according to 2020 data from the Insurance Bureau of Canada (IBC).
However, a 35-year-old Alberta man can expect to pay $1,991 a year for car insurance, according to RATESDOTCA data from late 2021.
That's an increase of 35%. Why the difference? The IBC collects premiums from all age groups, whereas RATESDOTCA data can filter out older drivers who bring the average down.
We use age 35 as a benchmark, a milestone in the insurance world. At this age, the differences in rates offered to men and women narrow by a significant degree. It's also close to the average age of Alberta, which is 39, according to the 2021 census.
The average savings for Alberta drivers who compared auto insurance quotes on RATESDOTCA is $736 in 2021. We found the savings by comparing the highest and lowest quotes offered.
Find your own personal savings rate by comparing insurance quotes. It's the best way to find out how much you'll pay.
To do a fair comparison of cities, we pulled quotes using the same driver profile: a 35-year-old man driving a 2018 Honda Civic with a conviction and claims-free insurance record.
|Rocky Mountain House||$1,849|
|Rocky View County||$1,849|
|Red Deer County||$1,746|
Two communities are currently tied for the cheapest car insurance rates in Alberta: Red Deer and Sylvan Lake. They sit roughly 25 kilometers apart from each other in central Alberta and are also equidistant from Calgary in the south and Edmonton in the north. The average rate for a claim and conviction-free adult in both places was $1,712 per year in late 2021. That’s 14% less than the provincial average for drivers of the same age.
The city with the highest premiums was Calgary. The average rate for Calgarians fitting our driver profile was $2,230, 12% higher than the provincial average. No surprise there — theft and collisions are more common in cities, and both result in claims that insurance companies must pay.
Edmonton, the capital city, lays claim to the second-highest premiums. Drivers aged 35 pay roughly $2,124 per year, 7% more than the provincial average but about 5% less than Calgarians. Interestingly, the premium difference corresponds with the difference in population size: Edmonton has approximately 4% fewer residents than Calgary.
Your driving and insurance records. An insurance company's prerogative is to figure out how likely you are to file a claim in the future. To determine that, they consider the following:
Where you live. If you live and drive in a city, your premiums will likely be higher than those in a rural area. Car theft isn't as frequent outside major cities, nor are collisions. But insurance companies don't stop at the level of city or town. They base your rate on your forward sortation area (the first three letters of your postal code that denotes geographical boundaries).
Your age and gender. Insurance companies also care about your personal characteristics, including age and gender. Statistical data show that men get into more road accidents than women. They're also more likely to be charged with driving infractions.
The type of vehicle. Insurance companies base a part of your premium on your car's make, model, and year. They need to know how much it might cost to repair or replace your vehicle. Insurers will often give preferred rates to customers with cars that have strong safety and handling features. Your rate will be even lower if thieves don't target your car.
How you use your vehicle. The number of kilometres you drive daily is also of interest to insurance companies. You will pay more for insurance if you have a long commute every day. If you drive a long way to and from work every day, insurers will offer you commuter coverage, which costs more than coverage for cars that are only used occasionally. The latter are rated “pleasure use” cars. To be eligible for pleasure-use rates, you must drive under a certain amount per year. The cutoff varies by insurer.
The business environment. Insurance companies report that the cost of doing business in Alberta is increasing. When operating costs rise, so do premiums. Car insurance companies single out these factors for causing rates to climb:
The car insurance industry is also feeling the impact of climate change — claims for damage caused by hail, flooding, and wildfire and increasing in Alberta.
Politics. When consumers complain about the price of insurance, governments tend to get involved. For example, in 2017, the Alberta government imposed a cap on premium increases. The province let it expire in 2019 and started an inquiry into the regulatory system. In 2022, Bill 41 went into effect. It aims to streamline the claims process and limit an injured person's ability to sue for damages. The changes brought Alberta's regulatory system in line with other provinces.
Saving on Alberta auto insurance is easier than you think. Follow these 10 tips to secure the best deal:
#1 - Get winter tires
The province does not require that vehicles be equipped with winter tires during the winter months, but Alberta’s transportation authority recommends them. Insurance companies consider them a key safety feature, so having winter tires usually gets you a discount.
#2 - Install an anti-theft device
Alberta records more annual car thefts than any other province. Even if you live in a quiet and safe area, an anti-theft device like a car alarm or GPS tracker will show insurance companies that you are taking all necessary precautions.
#3 - Bundle auto with home insurance
Insurance companies offer reduced rates if you use the same provider for multiple policies. In Alberta, home and auto are the most commonly bundled insurance products.
#4 - Insure all vehicles under one policy
If you have more than one car, insuring them all under one policy can save you as much as 20%.
#5 - Take a driver’s education course
If you are an inexperienced driver, a sensible way to save on car insurance is to take an accredited driver’s training program.
#6 - Increase your deductible
Increase your deductible by $1,000 in exchange for lower insurance rates. Just make sure you can afford it in the event of a claim.
#7 - Drive less
Many Albertans rely on their cars for their daily commute, but from an insurance perspective, less time spent driving means less chance of an accident. If you have the option of cycling, walking or taking transit to work each day, you could save a lot on your car insurance policy.
#8 - Pay premiums annually
Ask your insurance provider if you can pay your entire premium up front, rather than smaller monthly payments. Many companies offer a reduced rate for this as it cuts down on their administrative costs.
#9 - Consider usage-based insurance
A usage-based insurance (UBI) or telematics device is one way of dramatically lowering your annual premium. An app on your phone monitors when you drive, how far you travel, your average speed and braking habits.
Your premium cannot be increased for risky behaviour, but discounts of up to 30% are available for individuals who demonstrate good, safe driving. UBI has been available in Alberta since 2016, but not all insurance companies offer it yet.
#10 - Shop around
The best way to find cheap auto insurance in Alberta is to compare car insurance quotes from several providers. Thanks to websites like RATESDOTCA, the days of leafing through the phone book and calling around different companies are gone.
Simply spend a few minutes answering our questionnaire, and we will show you multiple rates from Alberta’s top car insurance providers, all in one place.
Alberta car insurance is expensive due to population density, distracted driving, and car theft.
Alberta’s two major cities, Calgary and Edmonton, are also among the largest in Canada. These urban centres are home to some of the busiest roads in the country. Unfortunately, having many drivers in a tight geographical area means more vehicular accidents.
Insurance companies charge higher premiums to help cover the cost of these claims. On average, drivers in Calgary and Edmonton pay more than rural Albertans. The high rates paid by Alberta’s city dwellers drive up the provincial average.
Cell phone use
From 2012 to 2019, Alberta averaged 24,000 convictions per year for distracted driving due to cell phone use. The numbers have fallen during the COVID-19 pandemic. In 2020, there were 21,612 convictions. By March 2021, there were only 13,012.
But distracted driving remains a leading cause of auto collisions in Alberta. If the trend continues, insurers may be more willing to offer improved rates to drivers.
Alberta has a disproportionately high rate of vehicle thefts. According to Statistics Canada, 19,215 vehicles were stolen in the province in 2020, or about 1,600 a month. Theft costs the insurance industry tens of millions of dollars a year. The result? Alberta’s insurers keep premiums high in part to cover replacement costs.
These were some of Alberta's the most stolen cars in 2021:
Car insurance is mandatory in Alberta (as it is across Canada). But before you can get insurance, you need a license. Operating a car without one is illegal.
Some countries have reciprocal licensing agreements with Alberta. You can exchange your current license for a Class 5 Alberta license without completing additional training if you have a full license from one of these countries:
If you're not emigrating from a country on the list, you can use your license for 90 days. You'll need to apply for an Alberta driver's license within that timeframe. You may need to pass a knowledge and road test before getting your new license. However, some drivers can apply for an exemption.
After you've crossed the licensing hurdle, you can get insurance. Some Canadian insurance companies will count your driving experience from your home country. Unfortunately, not all will. You may need to build your insurance history from square one.
Your car insurance policy won't cover you if you drive for a rideshare app. The good news is ridesharing insurance has been available to Albertans since 2016, introduced with Bill 16.
Under the bill, Albertans must have the following before they can pick up customers:
The maximum penalty for not meeting these requirements is a $50,000 per day fine.
Uber is the only rideshare company allowed to operate in Alberta. It provides insurance coverage at no extra cost to drivers. Uber insurance begins from the time you accept a fare until its conclusion. You're also covered by Uber when active on the app but between trips.
You're covered by your personal policy when you're not ferrying customers.
Here's what Uber's policy provides Alberta drivers:
Make sure you let your insurance provider know you're planning to drive for Uber. Not doing so could result in the cancellation of your personal coverage.
Alberta’s drivers pay the third-highest car insurance premiums in Canada. The latest figures from the Insurance Bureau of Canada show a 15% increase in 2020 compared to the previous year.
|Province||Avg annual premium||Avg monthly premium||Year over year change*|
|Newfound and Labrador||$1,274||$106||+9.08%|
|Prince Edward Island||$885||$74||+7.80%|
Data source: Insurance Bureau of Canada
Ontario, Alberta, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador – IBC with data from GISA exhibits auto1005-2020-ON, AB, and ATL; British Columbia (ICBC only)- ICBC Annual Report; Manitoba - MPI Annual Report, private insurers; Québec - Société de l'assurance automobile du Québec; Saskatchewan- IBC calculation with data from SGI, SAF, and private insurers; SK premiums are a proxy per policy for all vehicles.
*Comparison is between 2018 and 2020 data, as 2019 averages were not available at the time of publication.
The average amounts Alberta drivers have paid for auto insurance since 2008.
|Year||Avg annual premium||Avg monthly premium||Year over year change|
*Shoppers in Alberta who obtained a quote on RATESDOTCA and transacted via our contact centre from January to December 2021 saved an average amount of $736. The average savings amount represents the difference between the shoppers’ average lowest quoted premium and the average of all other quoted premiums generated by RATESDOTCA.