July 29, 2009 by Canadian Underwriter
Basic auto insurance rates in Alberta will decrease by 5%, according to the Automobile Insurance Rate Board (AIRB).
The rate reduction follows public hearings in which the Insurance Bureau of Canada called for a 6.4% rate increase.
According to the AIRB, the decrease is mainly a reflection of the Alberta Court of Appeal’s decision to uphold the province’s Minor Injury Regulation, which restores the cap on the amount an individual can claim for minor soft-tissue injuries.
On July 22, plaintiff’s counsel in the case of Morrow v. Zhang confirmed his clients would be seeking leave to appeal the Court of Appeal’s decision to the Supreme Court of Canada.
Expected claims and administrative costs, in addition to declining investment rates and increasing claims costs for insurers, were also taken into account when proposing the rate decrease, the AIRB notes in a release.
“Today’s announcement shows how auto insurance reforms are working for Albertans,” AIRB chair Alf Savage said in a press release. “Since the introduction of the reforms in 2004, rates for compulsory auto insurance coverage have decreased by 18%. As a result of this year’s decision, drivers, on average, will see a reduction of Cdn$30 per year in premiums.”
The decrease will take effect Nov. 1, 2009.