Late in 2022, an Ernst & Young report revealed what many in the province had been suspecting for some time. Albertans are paying the highest auto insurance premiums in the country. Ernst & Young sampled 27 different driver profiles across nine different provinces, and found that for 26 of those profiles, Albertans pay the most. For example, the report revealed that a 30-year-old married man driving a 2019 Ford F-350 with one recent accident on record would pay $4,791 annually in Alberta. That is easily the highest in Canada, with Nova Scotia next ($3,735), Ontario following ($3,568), and B.C. ($2,065) and Saskatchewan ($1,417) after that.
Some have questioned the methodology of the report, including representatives from the Insurance Bureau of Canada, who argued that there was no adjustment for differences in discounts, products or benefit rates across provinces, and that the highest and lowest quotes received in samples were removed. Regardless, as many Albertans are struggling with skyrocketing costs due to inflation, affordability is top of mind for many. The ability to save on expenses in any way is of incredible importance, which is why a recent announcement by the Government of Alberta came as welcome news.
Freezing auto insurance rate increases
On Jan. 26, a news release from the Alberta government announced they would be freezing all rate hikes until the end of 2023.
“We share Albertans’ concerns about the rising cost of living during the current inflation crisis. We will continue to meet with members of the insurance industry to find additional longer-term solutions for automobile insurance,” said a statement from Travis Toews, President of the Treasury Board and Minister of Finance.
The freeze does not apply to Albertans who have had changes in their driving records and habits, such as those who have received a ticket with demerit points, those who have had an at-fault accident, those who have had a change of address, and those who are insuring a new vehicle.
Help with payment plans
In addition to freezing rates, the Government of Alberta is now requiring insurance companies provide the option of paying in installments rather than a lump sum. Exceptions may be those with poor credit ratings and those who are in the habit of missing payments.
What is the grid rating program?
Protection for Alberta auto insurance customers comes in the form of the grid rating system. Insurers must look at the grid premium and their own premiums and charge the lesser rate for basic auto insurance coverage. Run through the Automobile Insurance Rate Board (AIRB), the “grid rating program was developed to establish the maximum rate insurance companies can charge for basic coverage (third-party liability and accident benefits).” Curious car owners can calculate their grid rate on AIRB’s calculator, and if the result is less than what you are paying through your provider you may have a case for a reduction in premiums.
Ways to save on your car auto insurance
While the rate cap may help some, many Albertans have already renewed their insurance for the upcoming year, and many at a higher rate than last. To save on your auto insurance rates, try these options:
- Access the assistance of an insurance broker. Insurance brokers such as us at Lane’s are able to find lower car insurance rates than your average agent because we can compare and contrast the policies of several different providers in order to find the best fit for you. Through our education and experience, insurance brokers also have access to a number of different types of discounts to help find you lower auto insurance rates.
- Remember you can change companies at any time. When you receive your renewal notice from your insurer it is the absolute best time to contact an insurance broker to see what other options are available to you. Generally, auto insurance policy holders have 30 days to negotiate different coverage for themselves before their policy will be automatically renewed. Within those 30 days you can change companies without issue. You can still change companies outside of the renewal window, however you may need to pay a penalty. We can help you figure out whether the savings we can provide will make changing make sense.
- Keep a clean driving record. A clean driving record is the very best way to keep your premiums down. Practise defensive driving habits, be careful and aware of others on the road, and consider driving as a privilege, not a right.
- Change your vehicle. Owning certain types of vehicles will result higher insurance rates, such as those that are stolen more often, those that have higher accident rates, those that are more expensive to repair, and so on. If you are looking to buy a different vehicle, ask an insurance broker what type may allow you to access lower rates.
- Consider usage-based insurance. Usage-based insurance relies on technology called telematics, which is a little device placed in your vehicle’s engine that sends driving information back to an application in your phone. The device tracks details such as hard braking, hard cornering, and rapid acceleration. If you perform well as a driver, the app will let you know. If you don’t, it will also let you know. Drivers enrolled in a usage-based insurance program can earn a one-time discount of up to 10% for initially enrolling, and demonstrating good driving habits after a certain amount of time can earn you a discount of up to 25% your total car insurance costs.
- Bundle your policies. If you are an auto insurance holder who also has home or tenant insurance (or other) policies, you may be able to access discounts by bundling their policies together with one company.
Get more from your insurance with Lane’s
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