Naw I DiscussAuto insurance prices, for Alberta drivers as rate cap ends – 2020. Alberta drivers are being hit with higher auto insurance premiums following the recent approval of rate hikes within the province.
The Automobile Insurance Rate Board (AIRB) approved rate hikes for 27 insurance companies last year. The increases range from but 1% to just about 30% for basic coverage, consistent with the Canadian Press.
The board, which is liable for regulating auto insurance within the province, sees this as a positive for drivers.
“Following nearly two years of rate restriction, some Albertans found it difficult to get the coverage they required or access to payment plans,” the board said during a report.
“These actions by insurers were directly associated with their inability to receive approval for rates commensurate with the danger .”
Alberta has relatively high rates compared to other provinces and therefore the insurance situation there’s a sophisticated one. In 2017, the NDP government introduced a cap on what proportion auto insurers operating within the province could raise premiums. Under the cap, AIRB couldn’t approve the requested rate increases of quite 5%.
When insurance companies disburse more in claims than they collect in premiums, they move to boost rates. But insurance companies argued that this cover made it challenging to remain afloat, and drove tons of small brokerages out of the province, which successively only increased rates more because there was less competition.
Alberta’s current government, the United Conservative Party, let that rate cap expire last September, so it’s few surprises that quite 92% of insurance companies that provide private vehicle coverage had asked for rate changes within the fourth quarter of 2019.
The rate hikes don’t come to the maximum amount of a surprise, especially to industry experts who viewed the speed cap as only a short-lived fix.
The Insurance Bureau of Canada (IBC), as an example, has mentioned it as a “band-aid solution.”
“Insurers actually don’t want to extend rates,” IBC’s Celeste Power told Global News. “They would rather keep their customer happy, give them the simplest rate possible. But we’ve seen increasing claims costs over the past few years that became quite unsustainable, and that’s once you see premiums follow.”
What the province needs, Power said, is long-term auto insurance reform.
Alberta Finance spokeswoman Jerrica Goodwin said during a statement that this is often within the works.
“We are going to be taking action within the coming months to deal with long-term affordability during a sustainable manner,” she said.
In the meantime, she said, Albertans are encouraged to seem around for the simplest rate on auto insurance.