You may have noticed that shopping for an auto insurance policy in Alberta is becoming increasingly frustrating. With increases in claim costs and the Alberta government capping auto insurance, Insurance carriers are finding themselves losing money.
Here's what you need to know about what is happening to auto insurance in Alberta right now.
Across Canada auto insurance rates have been on the rise. As much as 30 - 40% in our neighboring provinces. This is due to a number of factors:
Greater repair costs on vehicles - the inclusion of new technology, cameras and sensors has made what was once a simple repair an expensive proposition.
Bodily injury claims are on the rise - especially here in Alberta where recent rulings have increased bodily injury claim payouts significantly.
Increased mental anguish settlements being awarded.
Why is it hard to get insurance in Alberta?
Insurance companies saw the trend of rapidly increasing claims costs over a year ago and went to the Alberta Rate Board - an independent board run by the province of Alberta that oversees insurance rates in our province. Despite the fact that the data was crystal clear, the rate board responded by putting a cap on insurance price increases in Alberta.
This has resulted in insurance companies losing considerable amounts of money selling auto insurance in Alberta. They have responded by using all of their underwriting discretion to limit themselves to only write accounts where they hope to be profitable. This has left a large number of Albertan's in the lurch when looking for auto insurance and has put insurance brokers in the unfortunate position of having to deliver the bad news.
Who Will This Affect?
This will affect and has already affected Albertan's who have indicator's of poor risk in their history.
Drivers that have been cancelled or have had payment issues in the past will have trouble finding any payment plans available to them.
Drivers with more than 1 ticket in the last 3 years or more than one at fault claim in the last 6 years will likely have to pay the full annual premium up front.
In many cases credit ratings will be used to determine the availability of payment options.
Depending on prior claims, convictions and credit rating it may not be possible for drivers to get collision or comprehensive coverage.
The Insurance Brokers Association and the insurance carriers have been in constant discussions with the government in the hopes that they will recognize the problem they have created. We're hoping for a resolution to this soon.