Final Alberta reform package promises overall 20% rate savings

After months of wrangling, a final package of auto reforms has been released in Alberta, with a promised rate savings of 20% overall, the government says. The reforms are to be implemented by September, with the province’s Standing Policy Committee on Economic Developments and Finance (SPC) recommending a committee be struck to ensure a smooth transition. Cabinet will review the following recommendations by the SPC on June 7.
The package includes a minimum 5% rate reduction for people with clean driving records, as part of a new “premium grid”. As well, new drivers will see rate reductions of up to 75%, and occasional drivers will only pay up to 25% of their grid rate. The current rate freeze will also be carried through for another year. An Automobile Insurance Rate Board will be established after the first year of the program to deal with rate applications.
Against the wishes of insurers, the “take all comers” rule has been implemented which means a company must cover everyone who comes to them for insurance or find another company to do so. And government insurers SGI and ICBC may be allowed to compete in Alberta if the SPC has its way.
On the claims side, health care benefits are being increased to $50,000 from $10,000, but a $4,000 limit has been put on claims for “pain and suffering” or non-economic damages for minor injury defined as strain, sprain or minor whiplash. A dispute resolution process has been formalized which mirrors that in other provinces.
The transition committee is to report back in two years time on the success of the reforms.