The Insurance Brokers Association of Alberta (IBAA) is recommending Alberta’s government expand its no-fault insurance system to find more affordable and sustainable auto insurance for Albertans.
The IBAA published a white paper in early March entitled, “The Framework: Fixing the Alberta Auto Insurance System”. In the document, the IBAA says the current state of auto insurance in Alberta “has serious deficiencies that have led to an unsustainable system for the insurance industry, and ultimately, the Alberta consumer.”
The IBAA paper states consumers deserve more choice in benefit plans based on social and financial circumstances. It highlights the increasing costs of vehicle repair due to onboard technology as being beyond control, which will get more expensive over time once driverless vehicles are on the road. To that end, the IBAA recommends the government focuses on controlling areas it can, such as moving to a no-fault system for physical damage to vehicles.
Alberta has no-fault provisions in its regimen, but the system is primarily tort-based. The IBAA proposes the cost of repairing a damaged vehicle be covered by the company insuring it, and eliminating all costs associated with recovery and investigation where liability is an issue, or the other party is unknown.
In all, the IBAA white paper makes 20 recommendations. The association also encourages the provincial government to:
There are several factors influencing the cost of auto insurance in Alberta. These range from the cost of repairing vehicle damages to fighting insurance fraud. When the Automobile Insurance Rate Board permitted 20 insurers to hike their rates in January 2020, it was responding to the industry’s need to try to keep pace with the factors driving costs up.
An auto advisory committee appointed by Alberta’s provincial government is exploring options for a fair, affordable, and sustainable car insurance system for Albertans through a private-sector delivery model. Part of the committee’s research included launching an online survey for Albertans to participate in up until March 6.
It is possible the committee will recommend expanding the province’s no-fault insurance coverage. This is a system which limits the conditions under which an injured person can sue an at-fault driver for pain and suffering stemming from a crash. The committee delivers its recommendations to the government in June.