The Alberta government continues to weigh its options for reforming auto insurance, as consumers in that province pay some of the highest premiums in Canada.
After the government opted to not renew a 5% rate hike cap on car insurance in September 2019, a rate increase averaging around 10% followed. Recognizing the uproar from consumers, with some drivers facing premium hikes as high as 30%, the government appointed a committee to explore ways it could curb escalating rates.
Revisiting and possibly revising Alberta’s no-fault insurance provisions are among the course of actions the committee is reviewing. Part of that review involved surveying Albertans in February for their opinions on auto insurance reform. The three-person committee is now reviewing the feedback they received. The committee will deliver its final report to the government sometime in June.
Meanwhile, a separate survey of Albertans conducted by Nanos Research on behalf of FAIR Alberta found Albertans are three times more likely to prefer an at-fault insurance system (61% support) over a no-fault system (20% support). Whether or not these results will influence the government committee’s final report is guesswork.
Other organizations have come forward in recent weeks with proposals for the government, including the Insurance Bureau of Canada (IBC), which submitted a proposal it entitled, “Driving Change: Auto Insurance that Works”. In it, IBC states 93% of Albertans say they believe the auto insurance system can be improved, and 92% say they want options to manage their own premiums.
Among the recommendations IBC makes is encouraging Alberta to adopt what it calls, ‘More Care, Less Court’ – a solution offering consumers the choice to tailor their insurance premiums. Essentially, consumers could choose to pay a lower premium by forgoing tort access (not going to court for minor injuries). Or they could select higher premiums by buying higher limits and additional coverages that would allow them to take minor injuries to court. By adopting this measure, IBC states accident victims with common collision injuries would be eligible for twice the amount of pre-approved treatment they get today through basic car insurance policies while minimizing the likelihood of waiting on a court settlement.
Furthermore, the IBC proposal recommends Alberta implements usage-based insurance (UBI). It also calls for a direct compensation-property damage framework that is common in other provinces to eliminate the need for a consumer to attempt to recover the cost of a repair to their vehicle from an at-fault driver’s insurer.
The Insurance Brokers Association of Alberta (IBAA) also submitted a white paper to the Alberta government in March entitled, “The Framework: Fixing the Alberta Auto Insurance System”. In it, the IBAA recommends upping the use of technology such as UBI to assess risk more accurately when insurers determine premiums for drivers.
While Albertans wait for their government’s decision on reforming auto insurance, there are a few things drivers can do to try to find the cheapest rate, including: