On Jan. 26, a news release from the Alberta government announced they would be freezing all car insurance rate hikes until the end of 2023. This comes as a relief as many struggle with decreased affordability due to inflation ― a major problem throughout Canada ― but this isn’t the time for car insurance policy holders to relax and kick up their feet.
When rates are frozen, it’s an ideal opportunity to access the expertise of an insurance broker such as us at Lane’s to help you advocate for yourself. We can assist in ensuring you are getting the best coverage for your money and in navigating the often-confusing insurance landscape. Right now, comparison shopping for car insurance is more important than ever, and we know the right questions to ask.
Your insurance company may have already been approved for a rate hike
While the Alberta government has put the rate pause in place until Dec. 31, 2023, rate hikes that were approved before the government announcement will continue to apply. Insurance companies that were already permitted to raise their rates can continue to do so despite of the freeze.
Before your renewal period, inquire with your insurance provider as to whether they will be raising their rates this year and why. The answer could give you very good leverage for negotiation. If your provider admits they were previously approved, then ask what you, personally, can expect come renewal time. As numerous other companies will not be raising their rates, you now have extra influence in suggesting you will be starting the comparison shopping process with an insurance broker.
You have already had your insurance renewed
If you haven’t yet received your renewal notice, when you do, contact an insurance broker. Generally, car insurance policy holders have 30 days to negotiate different coverage for themselves before their policy will be automatically renewed. Within those 30 days, speak with an insurance broker to carry out your comparison shopping. If successful, you should be able to change companies without issue.
Those who have already had their insurance renewed (before the end of January) will sadly not see the benefits of the rate freeze. If this pertains to your situation, it’s advisable to begin to shop around aggressively. You can still switch 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 car insurance providers make sense.
How the new “at-fault” system may factor in
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 and those who have had an at-fault accident.
With regards to at-fault accidents, in the new year Alberta switched to a Direct Compensation for Property Damage (DCPD) program for car insurance claims. Traditionally in this province, if a driver is not at fault in an accident, such as if you were rear-ended or someone hit your parked vehicle, the payment for repairs came from the at-fault driver’s insurance company. With DCPD, payment for damages will be provided directly from your own insurer rather than the other party’s. DCPD is said to help reduce the overall cost of insurance by removing several slow and expensive steps from the car insurance claims process, such as having to demand payment from another company.
Drivers who are at fault for an accident will still see the expected raise in their rates, despite of the government freeze. But, that does not necessarily mean you will have to pay more for your insurance. It is always worthwhile to take a look around with the assistance of an insurance broker to see if a lower-priced option could be available to you.
Why brokers are better
The most effective way to get the best rates and the right insurance is to use an insurance broker.
Understanding the difference between an insurance agent and an insurance broker is pivotal when it comes to advocating for yourself within the insurance industry. An agent represents a single insurance company and only sells their services and policies. A broker deals with many different insurance providers to find the best coverage and rates available for your particular situation.
Brokers do not make money off their clients, but rather the insurance companies, which means there is zero incentive to recommend one policy over another. Because a broker is not limited to offering the products of a single provider, they can source the exact right policy to meet your needs.
Additional reasons why brokers are better include:
- Brokers have access to more discounts.
- Brokers have a wide range of knowledge in their field.
- Brokers are regulated through the Independent Insurance Brokers Association of Alberta.
- Brokers are flexible and accessible.
- Brokers are experts at identifying risk.
- Brokers are able to settle claims quickly and efficiently.
In a world of 1-800 numbers and automated phone systems, Lane’s Insurance continues to provide dedicated broker services. As long as Lane’s is your insurance brokerage, you’ll know your broker, and more importantly, we’ll know you. Contact us at our Calgary, Edmonton, Banff or greater Alberta offices to start the conversation.