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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 (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 (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:

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

Other helpful Alberta auto insurance resources

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