Alberta drivers are bracing themselves for potentially higher auto insurance premiums as new data show the province has some of the highest premiums and costs in the country.
According to a recent report from the General Insurance Statistical Agency, Alberta stands out with the highest proportion of legal costs in Canada, comprising a staggering 20% of the mandatory auto insurance premiums paid by drivers.
This figure is double that of Ontario and more than triple that of some Atlantic provinces.
The report, released Wednesday, depicts a concerning landscape where Alberta’s auto insurance system grapples with soaring legal and repair expenses.
Alarmingly, Alberta ranks second-highest in spending per claim on vehicle repairs and also faces the second-highest frequency of vehicle thefts nationwide.
“Alberta’s insurers are keen to work urgently with the government to tackle the cost pressures facing premiums and find ways to improve the affordability of auto insurance for drivers,” Insurance Bureau of Canada vice-president Aaron Sutherland said in a press release.
“Unfortunately, the action taken to date – including Alberta’s rate cap for good drivers – does not address the costs underlying drivers’ coverage and will do little to improve the price drivers are paying moving forward.”
A spokesperson for the Ministry of Finance said the Alberta government is looking for “long-term solutions” to the problem.
“The government is exploring all options to make auto insurance more affordable in Alberta and are considering all recommendations from Albertans and insurance experts,” said spokesperson Savannah Johannsen.
“We have commissioned an external consultant to conduct an in-depth analysis to inform long-term reforms. The insurance models of other jurisdictions – both within Canada and abroad are also being analyzed. The results of the analysis will help inform the government’s decision in implementing sustainable, long-term solutions to address auto insurance affordability in Alberta.”
The implications of the report’s findings extend beyond mere statistics. High legal costs, coupled with escalating repair expenses, are placing significant upward pressure on auto insurance rates in Alberta, already among the highest in the country.
Adding to the financial strain are rising healthcare levies, cash settlements for minor injuries, and bodily injury costs.
Without decisive action from the provincial government to address these concerning trends, drivers in Alberta could soon find themselves burdened with even higher auto insurance premiums coming.
Failure to act swiftly could exacerbate financial hardships for motorists and undermine the stability of the province’s insurance market, said the Insurance Bureau of Canada.
The Insurance Bureau of Canada is urging the provincial government to reform the insurance system and change its provincial insurance grid. Additionally, they are calling for the government to abandon the insurance premium tax and health levy.
