Albertans are paying more for car insurance than most other Canadians and the rates are continuing to rise, according to new data from LowestRates.ca.
The rate comparison site polled hundreds of thousands of Canadians and found that Albertans are paying four per cent more for car insurance this year than they were in 2016. It found rates in the province are 24 per cent higher than the national average.
LISTEN: LowestRates.ca CEO Justin Thouin on data that shows auto insurance rates are on the rise in Alberta
The Insurance Bureau of Canada (IBC) said Tuesday it’s aware of the upward trend and has been meeting with the Alberta government to see what can be done to keep rates stable.
What’s the reason for the rising insurance rates?
Bill Adams, vice president of western operations at IBC, said in the early 2000s the province had seen a similar bump in insurance rates that were the result of large payouts for minor injuries.
He said faced with rising rates, the government put a cap on the amount of cash that could be paid out for minor injuries. But, he said a couple of recent court cases have created some confusion about exactly what the courts consider a “minor injury.”
Adams said that some people who have injuries that were previously deemed “minor” are now suing and receiving much larger cash settlements.
LISTEN: Insurance Bureau of Canada on the reasons for the auto insurance rate increase in Alberta
“What we’ve seen is a certain class of injuries that the courts have said are no longer minor and should be allowed to be compensated for whatever they can get out of the court of law,” he explained.
“Back in 2010, if you had an injury, you’d get all the treatment you need and you could get perhaps $4,000 cash for the pain and suffering associated with that injury. Now, that same injury is getting $30,000, $40,000, $50,000 or more.”
“And we’re seeing more and more people showing up in courts with these particular type of injuries.”
LowestRates.ca CEO Justin Thouin and Adams both say other factors like insurance fraud and extreme weather may also contribute to rising rates.
“We have had hailstorms in Calgary and north of Calgary – in Airdrie – that have resulted in $500 or $600 million in claims costs. That’s a lot of roofs, a lot of sidings, a lot of broken windows. But a lot of vehicles as well,” said Adams.
But, Thouin said his company’s data shows that as high as rates are in Alberta right now – it could be worse.
He said their data shows auto insurance rates in Ontario are decreasing, but are still much higher than the national average. In fact, the average rate plan in Ontario is about $300 higher than the average plan in Alberta.
“So, not doing too, too badly versus certain provinces,” he explained.
How can consumers get a better rate?
Insurance companies change their rates each quarter and individual customers may not be impacted in the same way; one person’s insurance premiums may go down, while another’s increases.
That’s why Thouin encourages Canadians to visit rate comparison sites and shop around for the best deal.
“It’s kind of like reading tea leaves,” he said. “Because not all of the insurance companies move in the same direction for a person’s particular situation.”
Thouin said Albertans can also use rate comparison sites when you’re looking to purchase a new vehicle to see which ones have lower rates associated with them.
“There can be a big difference, even if the vehicles cost the same there can be some that are significantly less to insure than others.”
News Talk 770 also contacted Service Alberta but did not receive a response by publication time.
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