If you’ve just received your car insurance renewal, you may have seen a big increase in your rates. We’re going to explain what’s going on with car insurance rates in Alberta and answer your questions.
Why are car insurance rates increasing in Alberta?
Auto insurance rates are rising in Alberta because of the increasing frequency and cost of claims. This is the result of a high number of accidents as well as damage from the province’s many natural disasters and severe weather events (such as wildfires, flooding, hail, and wind).
The cost of repairing or replacing modern vehicles is also higher. This is because of labour costs, materials, and technology.
Currently, car insurance companies in Alberta are paying $1.12 in claims for every $1.00 in premium.
What affects auto insurance rates in Alberta?
There are many things that impact car insurance rates in Alberta, including:
- The make, model and year of your vehicle
- The MRSP or purchase price of your vehicle
- If you commute or not
- How much you drive each year
- Where you live
- Your driving record
- Your claims and insurance history
- Number of years you’ve been licensed
- Your demographics like age and sex
- Who else drives your vehicle (and their driving record and demographics)
- Your insurance options such as deductible, coverages, and policy limits
These factors are used by auto insurance companies to determine how “risky” you are to insure – or how likely it is that you’ll make a claim. They look at the crime and claim statistics of your community as well as the average cost of repairs for your vehicle and area.
I have a clean driving record, why are my car insurance rates going up in Alberta?
Even if you have a clean driving record, your auto insurance rates may still go up. Claims frequency and associated costs have gone up and insurance companies spread the losses across the entire customer base. You will likely have a smaller price increase with a clean record than if you had a ticket or a claim.
I don’t have any claims, why are my auto insurance rates increasing?
Your car insurance rates may increase even if you don’t have any claims. The cost of increased claims frequency and expenses are spread across everyone. Your rates may also go up because of other factors, such as if you’ve moved or gotten a ticket.
I have a ticket, how long will my car insurance rates be affected?
Tickets will affect your car insurance rates in Alberta for 3 years. If you only have one ticket, your premiums may not be impacted as insurance companies may “forgive” it.
The exception is if you have a serious or major traffic conviction, such as driving under the influence, careless driving, racing or stunting. Some insurance companies are considering distracted driving to be a serious infraction, too. These convictions may continue to impact your auto insurance premiums for longer.
I was in an accident, how long will my auto insurance rates be affected?
Accidents will impact your car insurance rates in Alberta for up to 6 years. If you were not at fault (i.e. the other driver’s insurance covered the cost of repairing or replacing your vehicle) it would not affect your rates. Your accident may also be “forgiven” by your insurance company if you have a claims or accident forgiveness add-on (known as an endorsement) on your car insurance policy.
Why is the premium on my older car higher than my newer car?
The premium can be higher on an older car than a newer car for many reasons, such as:
- Cost of repairs or replacement of the vehicle
- Statistically, how frequently the car is involved in claims
- Different levels of coverage on the two vehicles
- Use the two cars differently (for example, driving one far more often or commuting with one but not the other)
For example, if you have a 2014 F150 and a 2016 Hyundai Elantra, the F150 may cost more to insure because it is statistically more likely to be stolen or be involved in an accident.
Why is collision and comprehensive coverage not available?
Collision and comprehensive coverage is optional coverage in Alberta and car insurance companies are not required to provide it. This protection may be unavailable due to:
- Missed payments
- Having too many claims
- Having too many tickets
- The age of your vehicle
- Being an inexperienced or young driver
If your collision and comprehensive coverage is removed or unavailable, talk to your broker.
Why is my car insurance company requiring a new application?
Auto insurance companies may request a new application because they want to ensure they have the correct information to give accurate rates, discounts, and coverage.
Why is my Alberta car insurance deductible so high?
Your auto insurance deductible may be higher for two reasons:
- It was raised to the minimum required level by the insurance company.
- You’ve had a lot of claims.
- You raised the deductible to save money on your insurance rates.
One benefit of a higher deductible is that your car insurance rates will be lower. However, you need to ensure you have enough money to pay the deductible if you have a claim.
Why is my auto insurance company requiring me to raise my deductible?
Many car insurance companies in Alberta have raised their minimum deductible over the last year. This is to counteract the cost of claims and the frequency of people submitting small claims.
Why can I not pay my car insurance on a monthly plan anymore?
In Alberta, some insurance companies are reducing their payment options, including removing the ability to pay monthly. This option may not be available even if you’ve always paid on time and never missed a payment before.
If you need a monthly payment plan, talk to your broker. We may be able to place your car insurance with another company who accepts monthly payments.
Can I get better car insurance rates in Alberta with another insurance company?
You might be able to get better car insurance rates in Alberta with another insurance company. It depends on why your rates were increased. If your auto insurance premiums went up due to your driving record (accidents or tickets), you won’t see too much of a difference between insurance companies.
As your broker, we’ll work with you to find the best coverage for the best price. If you’re unhappy with your rates, we can get quotes from other insurance companies as well as help you get lower rates in general.
How can I get lower auto insurance rates in Alberta?
Here are a few things you can do to get cheaper car insurance rates in Alberta:
- Shop around – get quotes from different auto insurance companies
- Follow the rules of the road – tickets can increase your rates drastically
- Take alternative transportation for your commute
- Use winter tires once it’s consistently below 7C
- Be aware of common insurance scams and fraud
- Take a driver training course
- Install an approved anti-theft security device
- Only make a claim when you cannot afford to fix the damage yourself
How does DCPD affect my car insurance rates in Alberta?
DCPD is direct compensation for property damage coverage, a newly introduced protection as of January 1, 2022. This coverage will see some rate changes, with cars that are newer and more expensive to repair seeing their costs going up while those with older, less expensive cars to repair seeing their costs going down.
If you have any other questions, contact your broker or leave a comment below.