Understanding the 2024 Alberta Auto Insurance Reform

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Article Contents
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated on May 29, 2024

Visit author page
Picture of By <span>Aren Mirzaian</span>
By Aren Mirzaian

Updated May 29, 2024

Visit author page

4 minute read

Article Contents

Increasing claims, parts shortages, and higher costs of repairs have driven up the cost of car insurance in every Canadian province in recent years. However, auto insurance rates have consistently been highest in Alberta for one reason: personal injury claims. To make car insurance more affordable for Albertan drivers, the provincial government enacted the 2024 Alberta Auto Insurance Reform.

The 2024 Alberta Auto Insurance Reform at a Glance

  • Starting January 2024, Alberta auto insurance premiums are capped at the previous year’s inflation rate for “good drivers.”
  • There’s no set cap right now for drivers with less than outstanding records, but there are proposals to give Alberta’s Auto Insurance Rate Board (AIRB) more oversight to keep premium increases fair and reasonable.
  • Alberta’s Superintendent of Insurance now requires car insurers to provide premium payment plan options to Albertan drivers.

How do you get the cheapest auto insurance rates in Alberta under these updates, and how does the reform affect the powers of the Auto Insurance Rate Board? Read on to find out what these legislative changes mean for you and your car insurance pricing.

Full Overview of the 2024 Alberta Auto Insurance Reform

These are the specific details of the 2024 Alberta Auto Insurance Reform to reduce high insurance costs and make coverage sustainable:

If you have a clean driving record, then the latest auto insurance reforms will be a welcome change. The 2024 reform sets a cap on the maximum increase in car insurance rates for “good drivers.” This cap means an increase can be no higher than the previous year’s inflation rate. As of 2024, this means an auto insurer can raise it by no more than 2023’s inflation rate of 3.7%.

However, this only applies if you’re deemed a good driver. Any driver counts as one under the Alberta reforms as long as they meet the following conditions:

  • No more than one minor traffic conviction in the last three years
  • No major traffic convictions within the last three years
  • No convictions for traffic offences under the Criminal Code within the last four years
  • No at-fault accidents in the last six years

Be mindful and learn more about Alberta traffic laws to see what qualifies as traffic offences, whether major or minor. This helps you see which violations will be counted and if you meet the conditions above. For example, a photo 

A cap on rate increases will tie your premiums to inflation rates and make your Alberta life insurance premiums more predictable. Some critics, however, still think these guidelines are too strict for most Albertan drivers to qualify and benefit, which is why the next change below is so important.

There are proposed amendments to Alberta’s auto insurance regulations to give the AIRB more authority over car insurance rates. If granted, the AIRB would have increased powers to make sure that auto insurance premiums are affordable for the average Albertan. The proposed changes include the ability to require car insurers to give a rate filing, where the AIRB may review rates and lower them if needed.

Another suggested measure is giving the AIRB the power to require insurers to refund premiums to drivers during highly profitable years. This proposal was made partially due to the COVID-19 pandemic in 2019 when insurers reportedly received record profit increases of $150 million to $200 million because drivers were less likely to be out driving – and therefore, less likely to be involved in a car accident.

These amendments have yet to be passed in Alberta, but if they are approved, they can allow the AIRB to keep rates fair and prevent car insurers from profiting too much.

Before 2023, car insurers could require Albertans to pay their car insurance premiums upfront for the whole year. This made private auto insurance too expensive for many drivers, keeping them from protecting their vehicles with auto insurance.

The 2024 reform now requires car insurers to provide payment plan options so Albertans can choose staggered payments. This makes it easier for Albertan drivers to fit car insurance into their monthly budget and manage expenses.

Other proposals for further Alberta auto insurance reforms include adopting public insurance models and a no-fault insurance system like Ontario. Because a no-fault insurance system requires drivers to deal with their own insurers for claims, it can make claim settlement faster and more efficient for all parties involved. Currently, studies are being conducted in the province to see how feasible these long-term changes will be.

The below infographic should serve as a visual aid in case you want to understand the main aspects of the reform.

Overview of the reform: the key changes

Why it Matters

Alberta’s auto insurance reforms emphasize fairness and greater accessibility to affordable insurance. Here’s why the current changes and proposed amendments matter:

  • Greater payment flexibility: Now that it’s mandatory for auto insurance providers to offer premium payment plan options, they’re prevented from insisting on hefty upfront lump-sum payments. This helps Alberta drivers better manage their budgets.
  • More affordable rates for drivers: If you fall under the reform’s definition of a good driver, congratulations – your rates can only be increased up to the previous year’s inflation rate. But even if you don’t, the proposed amendments will give the AIRB the power to review and lower rates.
  • A stronger AIRB: By giving AIRB more oversight over the car insurance industry, they can strike a better balance between the profitability of private insurers and affordability for consumers. The proposed amendments allow the AIRB to mandate just rates, refund premiums during highly profitable years, and generally keep any increases at a justifiable amount.

But no matter how these reforms impact affordability and accessibility to car insurance, it’s important for Albertan drivers to still take all the necessary steps they can to lower their car insurance premiums. These steps include measures like shopping around to find the best price and bundling your auto insurance with other policies like home insurance.

Stay informed of any further changes to current regulations that may affect your car insurance premiums down the line. For more detailed explanations of changes to auto insurance regulations and how to keep your rates low, head on over to MyChoice.ca to learn more.

Key Advice from MyChoice

Now that you know how the 2024 Alberta Auto Insurance Reform affects your car insurance premiums and how you pay them, here’s some key advice from MyChoice:

  • If you qualify as a “good driver” under the Alberta reforms, there’s a cap on any increase to your car insurance rates. Practice safe driving habits to improve your driving record and become eligible for this cap as well as future ones.
  • Find the coverage you need at the best price by shopping around. With over 40 car insurers in Alberta, you can compare premiums, discounts, and other considerations before choosing the best car insurance policy for your needs. Use MyChoice to compare quotes between different providers and get the best deal for you.
  • Talk to your Alberta car insurer to see if you can switch your existing policy’s payment plan to ease the financial burden. By switching from upfront payments for the year to payment in installments, you can better plan how to fit auto insurance into your budget.

Congratulations! You made it to the end!

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