Alberta freezing insurance rate increases through end of year
Prior approved rate changes, updated driving records and tickets as well as changes to home address or insured vehicle type could all result in an increase for some drivers
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Alberta is pausing increases on insurance rates for private passenger vehicles through the end of the year, the provincial government announced early Thursday.
No new rate increases will be approved for the remainder of 2023, the government says.
“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,” Finance Minister Travis Toews said in a news release.
The announcement doesn’t mean no drivers will see their rates increase.
Prior approved rate changes, updated driving records and tickets as well as changes to home address or insured vehicle type could all result in an increase for some drivers.
The freeze also applies only to private passenger vehicles, according to the release.
In another change, the province is also now requiring insurance companies to allow most drivers to have the ability to pay their premiums through payment plans.
The release states that the government had heard concerns that some Albertans were having to fully pay insurance premiums upfront.
The government blames “factors such as inflation and supply chain issues for auto parts” for the apparent failure of reforms brought in during the fall of 2020, following a government-created panel one year earlier.
In December, Premier Danielle Smith said she wanted to take action on the file starting early in the new year, shortly after an Ernst and Young report found Albertans are paying the highest car insurance rates in Canada.
It sampled automobile insurance rates with an effective policy date of Sept. 1, 2022, across nine provinces for 27 customer profiles with varying driver demographics, numbers of drivers, vehicles and accident history.
For all but one of these profiles, Alberta’s insurance costs were the highest, though the company noted differences in insurance products as well as benefit levels and access between provinces frustrated exact comparisons.
Opposition New Democrats have blamed the UCP government for the high rates, saying the government’s 2019 move to scrap a rate increase cap on auto insurers that had been imposed by the previous New Democrat government.
“We put a cap in place and the UCP chose to remove it and now Albertans are paying far more than they should be,” NDP Leader Rachel Notley said Thursday.
“Well after the fact, long after the horse has left the barn, they’re promising to close it with a little freeze until the end of 2023. It’s far too little too late.”
— with files from Jason Herring
Twitter @ByMatthewBlack
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