Alberta gets 5% increase for mandatory auto insurance

Alberta’s Automobile Insurance Rate Board will allow premium levels for mandatory auto insurance to increase by up to 5%, effective Nov. 1, it announced in late July. Insurance companies have the option to implement all or part of that increase over the next three years.

The average cost of claims for 2012 and the estimates for prior years show “significant increases,” according to the AIRB, although it said the frequency of bodily injury claims is not an issue.

“We knew that an increase would be necessary, but we wanted to take a more measured approach in order to maintain balance in the system,” said Alfred Savage, AIRB chair. “A 5% increase, which works out to on average $30 per year, reflects current insurance trends while still keeping premiums at a reasonable level.”

The AIRB announced in April that it would be seeking stakeholder comments on the annual rate change.

The decision applies only to mandatory coverage, which is required by law and includes third party liability and accident benefits coverage. It does not include optional collision or comprehensive coverage. Those premiums are set by individual insurance companies and monitored by the board.