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What Affects the Cost of Auto Insurance in Alberta?

Feb. 27, 2020
3 mins
Two female roommates bringing groceries in from their car

Everything is bigger in Alberta, they say, but that doesn’t have to include the cost of car insurance. Nevertheless, motorists in Alberta may be finding it increasingly tough to find low auto rates since the province’s regulator gave more than 20 insurers the green light to increase their rates in January.

While the rate hike created an uproar, an Alberta government task force is exploring options for controlling the escalating costs of auto insurance in the province, including weighing the possibility of changing its no-fault insurance provisions.

As things stand today, and according to the Insurance Bureau of Canada, Alberta’s average auto insurance premium is $1,316, which is the third-most expensive in Canada after Ontario and British Columbia.

How Is My Car Insurance Rate Calculated?

The factors which affect the cost of auto insurance in Alberta are similar to those that affect rates in other provinces that offer private auto insurance. Insurers take into account, for example, the type of vehicle you drive, your age and driving history, where you live, how many kilometres you drive annually, as well as the number of collisions or traffic ticket convictions you may have.

Auto insurance is required in every province and territory to legally drive a vehicle, however, the requirements for mandatory coverages vary. In Alberta, the minimum amount of insurance you need is $200,000 for third-party liability and accidents benefits coverage. There are options for Alberta drivers to increase the limit for both, as well as to add non-compulsory coverages such as collision and comprehensive. Depending on where you live and drive, and how often you drive, it may be worthwhile to consider upping those limits and adding optional coverages as needed. While that will increase your premium, it also increases the protection and support you receive from your auto insurer should you ever need it.

On that note, and insofar as drivers’ perceptions of auto insurers goes, in J.D. Power’s annual Canada Auto Insurance Satisfaction Study, Albertans ranked the top seven auto insurers in the province based on a range of different criteria.

What Can Alberta Drivers Do to Lower Their Car Insurance Costs?

There are a few things Albertans can do to keep their car insurance premiums as low as possible, including:

  • If you’re buying a new vehicle, you may want to avoid purchasing one of the most stolen vehicle models in Canada
  • Pay your auto insurance premium from the get-go instead of paying monthly if you can
  • Be a courteous driver, don’t speed or get into a collision, and avoid a distracted driving conviction
  • Bundle your home or condo and auto insurance and get a discount from the insurer
  • Explore your options and shop around to find the cheapest auto rate available to you

The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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