Alberta Decides On Modest Auto Premium Hike

Alberta has settled on a rate increase for its mandatory automobile insurance.

Drivers will pay 5 per cent more in premiums beginning Nov. 1. The rate hike follows public consultations held by the Automobile Insurance Rate Board (AIRB) at which the Insurance Bureau of Canada (IBC) argued that premiums should be raised as much as 29 to 36 per cent.

IBC and insurers had sought the larger increase following a decision in Alberta’s Court of Queen’s Bench to strike down a cap of $4,000 limiting soft tissue injury claims. The cap was introduced in 2004 with the intention of keeping insurance costs under control.

During two days of hearings, the rate board’s own actuary recommended an increase of 14 per cent.  

Jim Rivait of IBC’s Alberta office represented the organization at the hearings and expresses disappointment with the board’s decision. “I don’t think the rate board has taken into account the full impact of the minor injury regulation.”

Alf Savage, chairman of the auto insurance rate board, suggests the decision balances the interests of both insurers and drivers.

“It’s up to the insurance companies whether they want to go 5 per cent or not. They’ve asked for as high as 37 per cent, so I assume they’ll be considering the 5 per cent in their preparations,” Savage told Canadian Press.

He notes that auto claims have, in fact, decreased while rates have remained manageable for consumers.

A TC Media site,
Business Solutions

TC Media

Transcontinental Media G.P
1110 René-Lévesque Bldv W.
Montréal, QC H3B 4X9
(514) 392-9000