Alberta is tackling vehicle insurance rates to help "good drivers"
The Alberta government will be bringing in price protections for drivers with good records amid ballooning automobile insurance rates.
The province announced Wednesday morning that Albertans with good driving records will experience price protection, meaning their insurance rates will not increase higher than inflation. The proposed reforms would start January 1, 2024.
The protection would be tied to Alberta’s inflation rate, using the September 2023 inflation rate. In September, Alberta’s inflation rate decreased to 3.7%, which was below the national average.
The province added that reduced driving patterns during the pandemic caused insurers to unexpectedly experience high profits, exceeding the benchmark set by Alberta’s Automobile Insurance Rate Board (AIRB).
Additionally, changes would grant the AIRB the authority to direct auto insurers to return premiums to Albertans in years when insurance industry profits are significantly higher.
AIRB could also request a rate filing from an insurer at any time to review and
possibly lower auto insurance rates if needed.
“We know that Albertans have been struggling with their auto insurance rates, and that’s why we’ve been working hard to find solutions. I’m pleased that we can work to bring forward these new measures to help,” said Premier Danielle Smith.
Smith added at a news conference this morning that the province will be looking at more long-term solutions in 2024.
The description of a driver with a good record is adapted from the AIRB’s guidance for the grid rating program. This includes anyone without the following:
- one or more at-fault accidents in the last six years
- any Criminal Code traffic convictions in the last four years
- any major traffic convictions in the last three years
- more than one minor traffic conviction in the last three years
“We understand the struggles many Albertans are facing, and we are working to ensure Albertans can afford the coverage they need,” said Nate Horner, president of the Treasury Board and Minister of Finance.
“We value the sustainability of the insurance industry and call for increased collaboration from insurers as we continue the work to address these issues.”
The Alberta government has been talking about transportation often this week– during its throne speech on Monday, the province alluded to the “inevitable need” for high-speed rail between Edmonton and Calgary.