From Our Partners
Laurie Bauer | Business Development Manager, TW Insurance Brokers
Changes to Alberta Auto
Insurance: Rate Increases
Changes have come to auto insurance in Alberta. Here is what you need to know
about the increases to auto insurance rates that will affect Alberta drivers.
Auto Insurance Increases to
the Grid Rate Level
In late September, the Alberta
Automobile Insurance Rate Board
(AIRB) announced an increase
to the current Grid rate level by
fi fteen per cent, eff ective January
1, 2020. The Grid rate level is set
by AIRB and is used by Alberta
insurance companies to determine
the maximum premium they can
charge for basic coverage, which
includes third party liability and
accident benefi ts. However, most
drivers don’t pay the full Grid rate
premium. Insurance companies
must calculate the premium for
a driver based on both their own
internal rate system and the Grid
rate, and charge the lesser of the
two. Only six per cent of drivers
pay full Grid premiums because
their insurance provider will
usually give them a better deal.
Cap Lifted on Rate Increases
As of August 31, 2019, the Alberta
government also announced
that it will not continue to limit
auto insurance providers
to a maximum fi ve per
cent annual rate hike.
52 | arta.net
In 2017, the government of
Alberta introduced a fi ve per
cent annual rate cap on auto
insurance premiums to protect
consumers from large increases.
Unfortunately, over the last
several years, insurance claims
have increased in cost while
rates have not kept pace, causing
insurers to operate at a loss.
When the fi ve per cent rate
cap expired, the government
of Alberta determined that it
was best to lift the cap so that
insurance companies could
operate sustainably.
To fi nd new ways to increase the
aff ordability of auto insurance and
address the comprehensive
coverage issues in Alberta’s
auto insurance system, the
Alberta government
is establishing a
three-member
advisory
committee to research and
recommend solutions. The
committee will report their
fi ndings in the spring of 2020,
after which the government will
act on these recommendations.
What Does This Mean for Me?
On average, the market is seeing
a rate increase of about fi fteen per
cent, so be prepared to see your
premiums increase when you
renew your auto insurance policy.
Why Are Rates Increasing?
Costs for auto insurance claims
are rising for several reasons,
and three of the major culprits
include: