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Why are Alberta car insurance rates increasing?

Auto Insurance

By Anne Valentino | January 15, 2018

No one likes an insurance rate increase. However, car insurance rates in Alberta have been going up over the past few years. Car insurance rates can be impacted by individual factors as well as by things not in our control. In order to understand why Alberta car insurance rates are increasing, this article will provide a brief breakdown.

Individual Reasons Why Alberta Car Insurance Rates Increase

As drivers, we can always do our part to try and keep our insurance more affordable and manageable. But keep in mind there are things that happen or events that take place which inevitably will have an effect on your insurance rates.

  • Tickets. Any sort of traffic violation can impact the price of your car insurance. Some insurers may forgive your first ticket, but others will cause your rates to increase. A major infraction can cause your rates to jump 30% or higher! Tickets also stay on your record for three years (and serious violations for longer).
  • Accidents. Unfortunately, accidents do happen. In the event that you are involved in a collision, you may notice an increase in your rates. Multiple accidents will result in even more of an increase. If you are concerned about how an accident can impact your car insurance it’s always a good idea to speak to your broker so that you get a more in-depth understanding of how accidents and insurance pricing intersect.
  • Claims. Submitting a lot of car insurance claims can result in higher insurance rates.
  • New Vehicle. When you purchase a new car odds are your insurance rates will see a bit of an increase. This is because it will cost more to replace or repair a newer vehicle. In order to make sure that the new rate is manageable you may want to discuss the details of a new car purchase with your broker.
  • Additional Drivers. Particularly when adding new or younger drivers, your insurance rates will go up. Simply put the more drivers you need to insure, the more money it will cost you. Inexperienced drivers are also more likely to be involved in an accident and so will cost more to insure.
  • Increased Commute Time. Generally, when getting an insurance policy you estimate the number of miles you drive in a given year. Now should you get a new job at a greater distance away thereby increasing how far you drive daily this will have an impact on the cost of your insurance policy.

General Reasons Why Alberta Car Insurance Rates Might Go Up

Accidents are not only assessed on an individual level but within a given region as well. Factors impacting the increase in Alberta’s car insurance rates include:

  • Natural disasters. Unfortunately, Alberta has had a lot of natural disasters over the past five to ten years, including wildfires and extensive flooding. This raises rates.
  • Claims. Alberta has a high number of claims due to those natural disasters, frequent hail storms, and other factors.
  • Insurance fraud. Incidents of insurance fraud are unfortunately common and raise car insurance rates for everyone in Alberta and across the country.
  • Vehicle advancements. Vehicles are getting more sophisticated which also means they can cost more to repair or replace.
  • Labour costs. The cost of labour has an impact on the cost of car insurance, as administrative and repair costs can increase.

If you’re frustrated with your car insurance rates in Alberta, talk to one of our brokers. We can suggest ways to lower your car insurance costs or shop around for a different insurer.

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