Ouch: Driver premiums in Alberta could rise by nearly 88% by 2033
A new report by the Insurance Bureau of Canada (IBC) revealed that if Alberta keeps its auto insurance rate cap, driver premiums may skyrocket.
The IBC says the province’s auto insurance rate cap is negatively impacting drivers, who are increasingly facing challenges securing the coverage they need.
In return, many drivers have to purchase new, often more expensive coverage from other carriers.
The MNP report commissioned by the IBC found that:
- If the rate cap remains in place and no changes are made to the auto insurance system, claims cost pressures could increase driver premiums by 87.6% between 2023 and 2033.
- With the “good driver” rate cap, there will be large differences in growth rates between those who are covered by the cap and those who are not. For “good drivers,” average premiums are projected to increase by 43.8% between 2023 and 2033. Albertans who do not qualify as good drivers will likely see premiums rise by an average of 148.2% over the same period.
The IBC also reported that over the past 18 months, premiums have grown 12% under the rate freeze implemented in January 2023 and the rate cap implemented in January 2024. Worse, drivers that fall outside of the rate cap are seeing their premiums increase by 15% on average annually.
“The report is clear that despite the government’s intention, the rate cap has made the affordability of auto insurance worse, not better, for Alberta drivers. It must be removed immediately before it causes any further damage,” said Aaron Sutherland, vice president of Pacific and Western Insurance Bureau of Canada (IBC), in a news release.
“Only meaningful action to address the cost pressures underlying auto insurance will improve affordability for drivers. Alberta’s insurers are keen to work with the government to take these actions.”
It’s the latest bad news for auto insurance in Alberta. Last month, the IBC said expenses from Calgary’s summer hailstorm may push insurers out of Alberta, putting extra pressure on an already strained auto insurance system.