Car insurance may be getting more expensive for drivers in Alberta after the province’s insurance regulator gave more than 20 insurers the go-ahead to hike rates.
Although the increases can range from 1% to as high as 30% for basic coverage on private passenger vehicles, the average increase drivers will see is around 10%.
The Automobile Insurance Rate Board (AIRB) says more than 92% of the insurers selling auto insurance in the province filed for a rate change, citing “some Albertans found it difficult to obtain the coverage they required or access to payment plans. These actions by insurers were directly related to their inability to receive approval for rates commensurate with the risk.”
In other words, these rate hikes come as a result of the annual 5% cap on auto insurance increases the former NDP provincial government put in place in late 2017. The cap expired on August 31, 2019, and the current Conservative provincial government did not renew it.
Rising Claims Costs Fuels Rate Hike
The AIRB also says the hikes will help insurers manage risk and the rising cost of settling collision claims, as well as motorists who are being denied coverage.
Of note, in 2018, the Insurance Bureau of Canada notes auto insurance claims hit a mind-blowing $18.2 billion in Canada – 83.8% of that sum due to collisions and other incidents involving private passenger vehicles. By comparison, insurers paid more than $12 billion to settle auto accident claims in 2017.
Insurers determine what car premiums should be on a broad range of criteria. These include traffic convictions, claims, the number of years driving, and the type of vehicle and coverage. There are 46 insurers in Alberta offering private passenger vehicle insurance.
Basic auto insurance in Alberta includes third-party liability and accident benefits coverage. Additional or optional coverage includes collision, all perils, comprehensive, specified perils coverage and underinsured motorist coverage.
How You Can Help Keep Your Premium Low
For drivers both in Alberta and across Canada, there are a few things you can do to help keep your auto premium rate as low as possible, including:
- Preparing Your Vehicle for Winter. Winterizing your vehicle by installing snow tires and driving defensively will help you avoid getting into a car accident. The more claims you file as a result of collisions, the higher your premium will be.
- Obey the Rules of the Road. Don’t rack up speeding convictions or other driving-related infractions.
- Forget Your Phone. Switch to “airplane mode” on your smartphone and focus on driving. Distracted driving is as much of a threat as driving under the influence of drugs or alcohol.
- Do Not Drive While Impaired or Fatigued. Never gamble with your life or others’ lives by driving impaired. Similarly, steer clear from driving while physically or mentally fatigued, as it too can compromise and affect your ability to drive safely.
Know What Your Auto Insurance Options Are
In light of the announcement, now may be the time for Albertan motorists to take a few minutes to find out if your current auto insurance rate is the best option available. Through Rates.ca, you can compare real-time car insurance quotes from over 30 insurers to find your best price for auto insurance.