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How car insurance coverage works in Alberta

Though car insurance is a requirement for all drivers in Canada, it’s important to note that there are differences in coverage requirements between provinces. In Alberta, for instance, auto insurance is provided by private insurance carriers, but the insurance rates themselves are regulated by the Alberta government. Car insurance coverage is also broken down into two categories – mandatory and optional. On the mandatory side, Alberta operates with a car insurance grid rate calculator. This grid rating program sets the maximum premium any insurer can charge for the mandatory coverage which includes third party liability and accident benefits. The lower you are on the grid, the less you pay for car insurance in Alberta. The other mandatory coverage requirements are no-fault insurance and accident benefits. Having only three requirements leaves a lot of room for customization via the numerous optional coverage extensions, such as collision and comprehensive.

Here is an overview of the available car insurance coverages in Alberta:

Coverage	Description
Public Insurance	Basic auto insurance coverage provided by the Provincial government. This generally includes liability, accident benefits and uninsured motorist coverage. Available: No Required: No
Private Insurance	Auto insurance policies created & sold by private insurance carriers. Though these carriers must still abide by Federal and Provincial regulations. Available: Yes Required: Yes
No-fault insurance	Having no-fault insurance doesn’t mean you can’t be found at fault. This coverage means you must first deal with your own insurance company for all claims, whether you’re at fault or not. But, Alberta will allow a no-fault driver to sue an at-fault driver for additional damages and costs that are not covered by their accident benefits. Available: Yes Required: Yes
Third-party Liability Insurance	Protects against damage caused by you while driving and includes injury and death to others and property damage. This is the only insurance coverage that is mandatory across Canada. Minimum coverage for Alberta is $200,000. Available: Yes Required: Yes
Accident Benefits	Covers your medical benefits if you’re injured in a crash, whether you’re at fault or not. The coverage includes your medical costs, while also paying for additional recovery costs, such as rehab, income replacement, and payment for and attendant care, if needed. Available: Yes Required: Yes
Direct Compensation-Property Damage (DCPD)	Covers damage to your vehicle and its contents, and for the loss of use of your vehicle when damaged – if another person was at fault. This coverage only applies if the crash occurs in a province where DCPD is mandatory, if two or more insured vehicles are involved, and if both insurers are licensed within that DCPD province. Available: No Required: No
Uninsured Motorist	Uninsured motorist coverage protects against injuries you and your family members sustain in a crash caused by an uninsured motorist. It can also cover your vehicle damages, if the uninsured driver is able to be identified. Available: Yes Required: No
Collision Insurance	Protects against damages sustained in a collision. This insurance covers you if your car is damaged in a crash – in both cases whether you crash into another other car or whether you crash into a stationary object. Available: Yes Required: No
Comprehensive Insurance	Protects against any losses a car owner may suffer, from events not related to driving. Such losses could include theft or damage from attempted theft; vandalism; environmental damage to a car from floods, fallen trees, and hail, etc. Available: Yes Required: No
Specified Perils	Covers your financial losses for damage caused specific perils – but only for perils chosen specifically for your policy. Available coverages are for theft; fire; damage from hail, lightning, wind, or flooding; earthquakes; explosions; riots; aircraft crash damage; and damage sustained during any transportation relocation. Available: Yes Required: No
All Perils	This combines the coverages you get with collision and comprehensive insurance. Additionally, all-perils also covers you if an employee, or someone who drives or services your car, steals it. It also covers you if someone you live with steals your vehicle. Available: Yes Required: No
Emergency roadside assistance	This service covers you for roadside callouts for emergencies such as dead batteries, towing, flat tires, keys locked in your car, empty gas tank, etcetera. Many insurance companies offer roadside assistance either included or in addition to other coverages. Available: Yes Required: No

*Table information sourced from http://www.ibc.ca (2017)

Historical Alberta auto insurance rates

The Alberta car insurance industry has seen significant change in the average rates they charge to consumers. Since 2007 there has been a +16.95% increase in average cost of car insurance in Alberta. The increase hasn’t been drastic like Ontario, but rather a steadier increase on a smaller scale. Car insurance rate changes are a result of a few factors such as market inflation, insurance fraud and claims volumes. The auto insurance rates are controlled and set by the provincial government. The Automobile Insurance Rate Board (AIRB) and the Office of the Superintendent of insurance are the two agencies within the government that manage car insurance rates in Alberta. The historical rate changes shown below are based on all the drivers insured each year by every company in Alberta.

Average Car Insurance Rate Change By Year

*Information and data sourced from https://airb.alberta.ca/ratechanges/ (2018)

Factors that impact your Alberta car insurance rates

To find the best car insurance rate in Alberta, it pays to shop around. While an insurance application is relatively standard, you will find that insurance rates vary from provider to provider. The variance is due to factors multiple factors, such as: existing clientele, the number of active claims on financial statements, and the level of risk the company is willing to take on. There are also several other factor beyond your control that can negatively impact an insurance rate calculation. For instance, urban areas in Alberta cost more than rural areas for car insurance because traffic congestion leads to a higher frequency of collisions. Here are seven factors Alberta auto insurance companies consider before offering a personalized car insurance quote:

Driver demographics

Gender and age play an important role in determining a driver’s car insurance premium. Men, aged 25 and under, are typically involved in more car accidents than their female counterparts and will therefore pay more in car insurance. Auto insurance companies look at data to better determine their risk and price it accordingly. Other demographic type factors include the amount of time spent driving, driving convictions, and whether you have any driver training. In fact, even being married to someone with an excellent driving history can help reduce your car insurance premiums.

Where you live

Where a driver lives can make a difference. Higher premiums for comprehensive car insurance may exist in neighbourhoods with a larger number of vehicle thefts and or vandalism. Living close to major roads or big intersections with a higher population density raises the risk and therefore the insurance. In fact, some major cities can pay up to 65% more than their rural counterparts based on the amount claims submitted in the area and the high volume of insurance fraud that occurs.

Vehicle type

The make of your vehicle, its model and the year of production will affect your driver’s insurance premium. In Alberta, there is a classification system to rank vehicles based on their claims history. Before you purchase a car, it’s a great idea to find out how much it will cost to insure. Some quick and easy ones to remember are vehicles with high safety ratings often have lower insurance rates, while expensive cars will generally pay more.

Driving history

Not all accidents are treated the same, but an at-fault accident will raise your premium for up to 10 years. Driving convictions, such as speeding tickets, stay on your driving record for three years. Even though one speeding ticket may only increase your rates slightly, repeated offences will have a significant impact on the price you pay. Major automobile crimes resulting in court convictions (e.g. distracted driving) have a significant negative impact on your car insurance premiums and may even result in the cancellation of your policy.

Driving activity

If you drive a lot, you will pay more for car insurance. Your commute time will impact your car insurance premium – the shorter the distance, the cheaper the rate and vice versa. If you can reduce the number of kilometres driven, by using public transit, biking, or walking – this is a great way to save on car insurance.

Type of insurance coverage

In Alberta, there are a few mandatory coverage types, third-party liability, accident benefits, uninsured driver protection, and direct compensation property damage that are included in every driver’s policy. Optional coverages are available and while they will increase your premiums they could save you a lot of money should the need arise. The most common additional coverage options are: comprehensive, collision, transportation replacement, and the removal of vehicle depreciation.

Applicable discounts

There’s lots of ways to save money on your car insurance in Alberta. If you have more than one car insured with the same company, if you bundle it together with your home policy, if your car is equipped with an anti-theft device, if you have winter tires and even if the car is a hybrid model- you can save money. Be sure to speak with your insurance provider for ways to save!

How to get cheap car insurance in Alberta?

Shop and compare

Research which car insurance company provides the best value for you and your vehicle. In Alberta, rates change four times a year, but lucky for you comparing rates with us is free.

Stay with your current insurer

Some car insurance companies in Alberta hand out loyalty discounts to drivers who remain active on their plans for years. This is especially true if they add family members or multiple vehicles to their policy.

Bundle Your Policies

If you use the same insurance company for both your home and auto insurance, your insurer will often thank you with a discount on your premium.

Get a multi car discount

If you have multiple drivers and vehicles under the same roof, by putting them all on one policy can lead to a reduction in your premiums.

Increase your deductible

This is the portion you pay when settling a claim before your insurance provider will pay the rest. If you’re willing to double down on your deductible, it could save you money.

Ask about discounts

If you’re a member of an Alberta Motor Association (AMA), a large corporation, union, or a member of your school alumni, you could get cheaper car insurance.

Pay premiums annually, instead of monthly

Paying monthly adds administrative costs to your insurer. If you can help them by paying one lump sum annually, they will thank you by lowering your premiums.

Maintain a good driving record

Be a safe driver, the insurance companies love it. Obey the rules of the road and drive according to road conditions, they look upon this fondly. If you, through these practices, can reduce your chances of an accident, you will pay less.

Install winter tires

You can save up to 5% simply by equipping your car with winter tires. Winter driving conditions can be treacherous throughout Alberta. It pays to be safe!

Keep track of your driving

There are telematics devices that collect driving data. With user-based insurance (UBI) you can earn your discounts if you’re not driving far or often. These devices even look at advanced stats like how carefully you brake and accelerate.

Take a course

Are you new to driving? A driver’s education course can save you money. Car insurance providers will think of you as a safe driver if you’ve received lessons by professionals.

How to get an Alberta driver's licence

In 2003, the Alberta government introduced its graduated driver licensing system (GDLS) requiring each driver to progress through a 3-step educational program in order to be considered a fully licenced driver. Once you’ve successfully completed the GDLS, you can legally operate a car, a motorhome without airbrakes, tow a trailer, or even drive recreational vehicles like a moped. Let’s take a quick look at this phased approach:

Class 7 licence (or level one) eligibility criteria:

You need to be at least 16 years of age
Provide proof of legal name, date of birth, and signature. (e.g. Passport, birth certificate)
Pass a vision test
Pass a written test about the rules of the road
Pay the associated written test fees
Can’t consume alcohol and drive
Must be accompanied by an eligible licenced driver

Class 5 provisional licence (or level two) eligibility criteria:

You need to pass your first road test with any Registry Agent
You can attempt your first road test after at least 1 year of having your Class 7 licence
You must pay an administrative fee
Can’t consume alcohol and drive
All passengers must wear a seatbelt

Class 5 licence (or level three) eligibility criteria:

You need to pass a more advanced road test with any Registry Agent
Must remain suspension free for a 2-year period
Must wait at least 24 months to attempt the road test
There is also another administrative fee to pay

Frequently Asked Questions about Alberta auto insurance

Do I need auto insurance in Alberta?

Yes, it’s the law. You are required to have the mandated third-party liability insurance of $200,000 and the accident benefits coverage.

Does my insurance cover me if I drive for Uber or Lyft?

It’s important to remember that in Alberta you will always need your own insurance in order to operate legally operate a vehicle. In the summer of 2016, the Superintendent of Insurance of Alberta passed a new ridesharing insurance policy. Uber purchased the new commercial insurance policy putting into effect on July 1st of the same year. Uber offers full coverage on their commercial policies when you are logged in and actively working as one of their ridesharing drivers. We recommend that you contact your car insurance company to inform them of your ridesharing intentions. If you fail to notify your auto insurer you could, you could see some negative results, like cancellation of your policy.

Why does car insurance in Alberta cost so much?

According to a report by Ontario’s Ministry of Finance, Alberta drivers pay an average of $1179 annually for their car insurance which ranks third in Canada. The volume of claims, fraud, and other convictions within a province impact premium pricing.

Do I need winter tires in Alberta?

While it’s not required, it’s a great idea to have winter tires for your vehicle. For one, it can save you money on car insurance. Winter tires are also a great safety measure for that legendary Albertan snow - they’re softer and provide a stronger grip on ice and snow.

Is roadside assistance required in Alberta?

No, but it’s a great for peace of mind in case of a battery failure, tire puncture, or you need a tow. It might also save you money on car insurance. AMA, for instance, starts at $86/year.

How do I report a claim in Alberta?

Call your insurance provider. The number is typically listed on the pink slip and people often keep this slip in their glove box.

How long do driving offences last on my driving record in Alberta?

A moving violation in Alberta will stay on your record for 3 years following a conviction. If you are in an at-fault accident, it can stay on your record for a minimum of 6 years. Demerit points will stay on your record for 2 years.

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