The government of Alberta is pausing rate increases for private auto insurance until the end of 2023, according to a news release Thursday.
“Affordability is a primary challenge for Albertans, as rising inflation makes it challenging for many people to afford other necessities, including auto insurance,” said Matt Jones, Minister of Affordability and Utilities.
According to the province, no new rate hikes will be approved for the rest of the year; However, some Albertans may see a rate increase at renewal this year.
“This could be due to a change in a previously approved rate, a change in driving record including at-fault claims and tickets, or a change in insurance profile such as a new address or a different vehicle being insured,” the province said.
The province said it is also hearing concerns that it has been a challenge for Albertans to pay their annual auto insurance premiums in one lump-sum upfront payment. To help with this, the province is requiring insurance companies to let most Albertans pay their premiums through payment plans.
“In addition to capping rates by the end of 2023, the Government of Alberta will continue to develop short- and long-term solutions for stable and low auto insurance rates,” the province said.
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The government is also looking for a long-term solution to Alberta’s high insurance premiums, which are among the highest in the country.
A report released by Ernst & Young in December found paying an 18-year-old male student with a Stage 2 learner’s license and a 2012 Honda Civic LX $2,311 per year, compared to $6,140 per year in Calgary and $6,471 per year in Edmonton Have to do West Kelowna, BC in, and only $1,128 per year in Saskatoon, Sask.
The difference in prices across other driving profiles is similar – for a single, employed 35-year-old woman with 19 years of driving experience and a 2018 Volkswagen Tiguan, she’ll pay about $2,700 per year, compared to $1,876 in both Calgary and Edmonton . years in Toronto, Ont., and Nanaimo, BC. just over $1,000 per year
Other recommendations from the government for those struggling with auto insurance include shopping around for better rates, working with existing brokers for better deals, and getting home and property insurance.
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The opposition NDP said the UCP has claimed in the past that rate caps don’t work and recently blocked NDP legislation that would have put a “real freeze” on insurance rates.
“The UCP removed the rate cap brought in by our Alberta NDP government and insurance premiums skyrocketed. Auto insurance rates soared by 30 per cent during the pandemic – at a time when Albertans were driving more and working less – and the UCP did nothing,” said finance critic Shannon Phillips.
When in power, the NDP established a rate increase cap, limiting auto insurance providers to a maximum of five percent annual rate increases. The UCP allowed that cap to expire months after it was elected in 2019, claiming that the cap was harmful to both industry and consumers.
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“Now Albertans are paying for the most expensive auto insurance in the country in the midst of the worst affordability crisis in 40 years,” Phillips said.
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