At a news conference on November 1, Alberta Premier Danielle Smith announced new auto insurance reforms intended to provide financial protections to Albertans. Smith acknowledged that auto insurance rates have climbed significantly in recent years, and while insurance rates have been paused until the end of the year, further relief is necessary once the pause has been lifted.
One of the key reforms announced is a measure that will provide price protection to people with good driving records, ensuring that their insurance rates will not increase at a higher rate than inflation.
The provincial government will also revise regulations to ensure that insurance companies offer flexible payment plans, eliminating the need for Albertans to make full upfront payments for their coverage. These adjustments are designed to ensure that the auto insurance industry can continue to handle claims costs, safeguard Alberta’s drivers, and deliver financial relief to Albertans.
In addition to these reforms, the government will empower the Alberta Automobile Insurance Rate Board (AIRB) to demand that insurers refund excess premiums to Albertans in years when the insurance industry generates significantly higher profits. Furthermore, the AIRB will be authorized to request a review of rate filings by an insurer at any time, potentially leading to reductions in auto insurance rates if warranted.
Smith acknowledged that these are short-term solutions in response to Canada’s inflationary economy and that Albertans have long-term concerns about the rise in auto insurance rates. To this end, the provincial government has commissioned an external consultant to conduct a comprehensive analysis regarding longer-term reforms. The draft report is expected to be available by the end of 2023, with the final report slated for release in the first quarter of 2024. The insights from this analysis will play a pivotal role in shaping the government’s plans for the long-term transformation of the auto insurance sector.
To ease the financial burden on Alberta drivers, the current rate pause will remain in place until the conclusion of 2023. While the proposed 2024 reforms will not establish a dynamic price ceiling for insurer-requested rate increases, they will focus on how these increases are distributed among customers, especially those with strong driving records. Any rate hikes in 2024 will be meticulously monitored to confirm their reasonableness and justifiability. Albertans are encouraged to continue shopping around for the insurance coverage that best suits their needs.
Dean LaBerge, Local Journalism Initiative Reporter, Grizzly Gazette