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Recent Alberta car insurance news
Matt Hands, VP, Insurance and MoneySense
A recent study published (October 2022) by Ernst and Young (EY), showed that drivers in Alberta now face some of the highest auto insurance prices in Canada. The report was commissioned by the Insurance Commission of British Columbia (ICBC), and was focused on 30 driver profiles between the ages of 18 & 60.
A total of 24 out of 30 profiles tested found that the highest auto insurance rates were in Alberta. The breakdown by city was: 11 for Edmonton car insurance, 10 for Calgary car insurance, and the rest were located in the Red Deer area.
Many believe this a direct result of the Alberta's auto insurance cap being lifted on August 31, 2019 - leading to a 30% increase in rates to date. This is roughly an increase of +$777 per vehicle according to Stats Canada.
This report has been widely criticized for it's inaccuracies and short-comings due to limited sample size and failure to account for the true insurance purchasing experience - omitting factors such as discounts that would impact rates. Overall Alberta's insurance prices have increased by roughly 3% in 2022, a rate that is lower than inflation according to the Insurance Bureau of Canada.
What should you do about Alberta's car insurance rate increases?
The best advice we can offer is to simply shop the market. No two insurance companies will rate you the same, in order to combat market inflation you need to comparison shop to find the cheapest rate.
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How does car insurance in Alberta work?
Like the rest of Canada, car insurance is mandatory across the province of Alberta – you're legally required to insure your vehicle before taking it out on the roads. Auto insurance in Alberta is provided by private carriers. These companies receive regulation for their rates through the government's Automobile Insurance Rate Board (AIRB).
Albertans currently pay the third-highest rates for auto insurance in Canada (after British Columbia and Ontario), and there is much talk of reform to reduce rates. In January 2022, the provincial government enabled legislation changes, requiring drivers to carry Direct Compensation for Property Damage (DCPD) insurance. This type of coverage is part of a no-fault auto insurance system – drivers only deal with their own insurer when making a property damage claim after a collision, regardless of fault. The idea behind this system is that the claims process will be expedited and drivers will receive their funds earlier. It lowers the related costs that come with recovering compensation from a third party.
The province also operates with an auto insurance grid rate calculator. This determines the maximum rate an insurer can offer (for basic coverages) based on a driver's risk profile. The higher you sit on the grid, the more you'll be paying – but still, most drivers won't pay their exact grid premium as it is more so a cap for insurers to price their premiums accordingly.
If you're looking to learn more about auto insurance in Alberta, we can help. Read on to make sure you understand everything there is to know about the coverage you need.
The different types of car insurance in Alberta
In Alberta, car insurance is required by law – you'll need to protect your vehicle with the minimum mandatory coverages. Beyond that, you can increase your protection with various optional coverages, depending on your own personal needs.
The following types of car insurance are mandatory in Alberta – it is standard for all auto policies across the province to include these coverages.
- Third-party liability – This protects you in the event you cause damage to other people or their property when driving. While it's mandatory across Canada, the minimum coverage required differs by province – you'll need at least $200,000 in other Alberta. Most drivers default to $1 million in coverage but you can also increase your limit further to $2 million for the additional peace of mind.
- Accident benefits – Accident benefits covers the medical expenses if you’re injured in a crash – whether you’re at fault or not – paying for services outside of the provincial coverage, such as rehab, income replacement, and attendant care. In the worst case scenario, it can also cover the cost of funeral expenses. And this type of insurance can also extend to the injuries of passengers, pedestrians, and cyclists too.
- Direct compensation for property damage (DCPD) – If another driver is at fault in an accident, DCPD covers the damage to your vehicle and its contents, as well as loss of use of your vehicle while it's being fixed. If you're at fault, however, you'll need collision insurance to help cover the repair or replacement bill. Not all provinces run with DCPD insurance – this coverage only applies if the crash occurs where it's mandatory (which includes Alberta), if two or more insured vehicles are involved, and if both insurers are licensed within that DCPD province.
Are you getting the cheapest car insurance in Alberta?
Alberta auto insurance rate changes
Here is a graph outlining the yearly change in average Alberta auto insurance premiums within the last decade, according to the province's Automobile Insurance Rate Board.
Rate increases happen for many different reasons – this can include the inflated cost of materials used for vehicle repairs, as well as an increase in the number of claims being made. Insurers need to make this money back somewhere, and more often than not, drivers are the ones who need to chip in.
In 2018 and 2019, auto insurance companies faced a rate cap – cost pressures could no longer be addressed which then limited the number of available and affordable options for many Alberta drivers. While this cap was later lifted in late 2019, insurers then filed to increase their rates, allowing a competitive return to the marketplace. This change is shown in the data from 2020, with a peak year-over-year increase of 8.3%.
How to get cheap car insurance in Alberta
Shop and compare
Research which auto insurance companies offers the cheap premiums. While rates may change overtime, comparing Alberta car insurance quotes with us is free.
Alberta auto insurance companies tend to give discounts to drivers who remain an active customer for years – especially if there's family members and multiple vehicles on the policy.
Bundle your policies
If you use the same insurance company for both your home and auto insurance needs, your insurer will often thank you with a dip in premiums.
Get a multi-car discount
If you have multiple drivers and vehicles in the same household, putting them all on one policy can save you money.
Ask about discounts
If you’re a member of a large corporation, union, or a school alumnus, you could b eligible for cheaper car insurance – just ask your broker or agent for group rate options.
Pay annual premiums
Paying auto insurance premiums monthly adds administrative costs to your insurer, so if you’re able to pay annually, you can lower your rate. It also shows the company you're planning to stay loyal.
Maintain a good driving record
If you’re a safe driver, you can reduce your chances of an accident. Car crashes stay on your insurance record for years and can result in higher premiums.
Install winter tires
Did you know you can save simply for installing winter tires on your vehicle during off-season? Not only that, it'll also make you a safer driver.
How much is car insurance in Alberta?
According to the Alberta Automobile Insurance Rate Board, the average cost of auto insurance in 2021 was $1,578. Could you be paying less? Let's find out today.compare quotes
How to get an Alberta driver's license
In 2003, the Alberta government introduced its graduated driver licensing system (GDLS) requiring each learner to progress through a three-step educational program in order to be considered a fully licensed driver. Let's take a look at this phased approach.
Class 7 licence eligibility criteria
Class 5 graduated licence eligibility criteria
Class 5 licence eligibility criteria
Frequently asked Alberta car insurance questions
Do I need auto insurance in Alberta?
What is the best car insurance company in Alberta?
What is the cheapest car insurance in Alberta?
Can you insure a car without a license in Alberta?
Who can drive my car under my insurance in Alberta?
Does my insurance cover me if I drive for Uber or Lyft in Alberta?
Do you need insurance to register a vehicle in Alberta?
Why does car insurance in Alberta cost so much?
Do I need winter tires in Alberta?
Can I bundle my auto and home insurance in Alberta?
Matt Hands, Business Director of Insurance
With 6+ years of experience at Ratehub.ca, Matt’s focus has been on growing its newest business unit, Insurance. He is a thought leader and a valuable resource to respected publications across Canada. read more