Canadian Underwriter

How much did auto insurance rates go up in Alberta last quarter?

January 13, 2020   by Jason Contant

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Alberta’s Automobile Insurance Rate Board (AIRB) has approved rate increases for more than 20 insurers in Q4 2019, ranging from less than 1% to nearly 30% for basic coverage for private passenger vehicles.

The rate hike was about 10% on average. Over 92% of the private passenger vehicle market submitted filings for a rate change from September to December 2019, and many were implemented for new business during this quarter, AIRB reported in its Q4 2019 rate filings, released Friday.

AIRB approved a 29.8% rate increase for Certas Direct Insurance Company for private passenger vehicles (and a 0.2% decrease for additional coverage, for a combined rate change of 20%). On the other end of the scale, Zurich Insurance Company Ltd. received a 0.1% basic rate change and a 2.2% decrease for additional coverage, for a combined rate change of -1.1%.

Some insurers had no change in basic rates, with others ranging from 4.9% up to 27.9%, showed the rate board filings for Oct. 1, 2019 to Dec. 31, 2019.

For combined rates (which includes basic and additional coverages), the increases were less, up to 20% at most.

Celyeste Power, vice president of Insurance Bureau of Canada’s (IBC) western region, said that the new hikes are about 10% on average.

Power said she hopes longer-term reform will come from a provincial panel currently reviewing the entire auto insurance system to determine ways to improve it for the industry and drivers. The panel is to report back in the spring.

“Following nearly two years of rate restriction, some Albertans found it difficult to obtain the coverage they required or access to payment plans,” AIRB said, referring to the former NDP government’s 5% cap on auto rate increases which began in late 2017. “These actions by insurers were directly related to their inability to receive approval for rates commensurate with the risk. The AIRB expects insurers who received approval for a rate increase to cease practices that limit access to certain coverages for Albertans.”

The ministerial order limiting AIRB from approving rate increases greater than 5% on an individual insurer’s overall rate level expired on Aug. 31, 2019, after being in place since Nov. 1, 2017.

The approved overall rate level change does not reflect how an individual driver’s premium may change as a result of the insurer’s rate filing, but reflects the average rate level change for all drivers who are insured with the carrier.

Basic coverage includes third-party liability and accident benefits coverage; additional coverage includes collision, all perils, comprehensive, specific perils coverage and underinsured motorist coverage. The province has 69 active insurers and 46 who offer private passenger vehicle insurance.

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7 Comments » for How much did auto insurance rates go up in Alberta last quarter?
  1. John Clark says:

    Albertan’s suffered a 30% increase on cars homes and personal property in the guise of covering losses from the McMurray Fire and the High River Floods.

    There are 3,589,000 motor vehicles in Alberta at even 100 increase is sufficient change to put them above-average profits.

    On the darker side of politics, Klein though Prentice took 3% kick back from the insurance industry to line their war chests.

    No matter which item you consider or which amount you consider it is too much. If anything, we should be getting reductions for the 30% which never came off.

  2. Filip says:

    Hoping to see these rate hikes come to an end. If rates keep climbing, we can expect a lot more uninsured motorists on the road. I also hope to see more insurance companies follow the footsteps of Aviva and make payouts a bit more difficult for possible fraudsters.

  3. tedd says:

    Customers benefit most when companies fight it out and compete on price and product. My opinion is governments help their voters best when they encourage exactly that… And then get out of the way. I personally love the choice of products and prices i see in stores .. and online etc . I can choose to spend money on a car,furntiture, clothes or whatever. I sleep well at night knowing that if i buy a product in a fiercely competitive market – then i am getting a fair price. If our government review of auto insurance results in changes to the rules and coverage …then the market will recalculate the cost .. mark it up by a profit margin and offer it for purchase..Then consumers will shop for product and price and decide who to buy from … this simple system works.

  4. Hermann says:

    It would be beneficial if good drivers get rewarded with lower premiums. For Example: a new driver pays 100% of premium. Every year he has no claims he gets a 5% premium reduction until he hits 40% and stays there. A bad driver would pay more. Maybe 10% more for first claim, 25% for second claim until the premium is so high that he can’t afford insurance anymore and consequently he is not driving anymore. The road is much safer.
    Also, if your vehicle is stolen and you can’t show both of your serialized key fobs, insurance doesn’t pay your loss. You have been irresponsible by leaving your key in your car when you were not in the car.

  5. Gil hewko says:

    How many votes did Kenny receive from insurance company’s indirectly by lifting the controlled increases .

  6. Gil hewko says:

    Also this excuse of fires and floods in Alberta,where’s the money they collected all these years gone too .quit brainwashing the public very poor excuse,be like you should save for rainy day.———I thank Canadian underwriter for not asking me for my password

  7. Aviva told Global News it filed for and received permission from Alberta s rate regulator to increase rates for auto insurance following the UCP s decision in late August not to renew the rate cap on auto insurance premiums.

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