As we navigate the ever-evolving landscape of auto insurance in Alberta, I would like to bring your attention to the recent government reforms that will significantly impact our auto insurance policies. These changes, guided by a commitment to fairness and sustainability, are expected to take effect on January 1, 2024, and aim to provide much-needed relief and benefits to Alberta drivers. Although effective JAN 1 2024, we may not see implementation of new rates from companies until mid year.
Key Reforms to Note Below:
1. Rate Increase Cap for Good Drivers: Starting in 2024, Alberta drivers with good driving records will enjoy a cap on auto insurance premium increases. This means that the cost of their insurance cannot be increased by more than the September 2023 inflation rate, which was at 3.7%. To qualify as a ‘good driver’, one must not have had at-fault accidents in the last 6 years, criminal code traffic convictions in the last 4 years, major traffic convictions in the last 3 years, or more than one minor traffic conviction in the last 3 years.
2. Enhanced Authority for the Automobile Insurance Rate Board (AIRB): The proposed reforms will empower the AIRB with greater regulatory control. This includes the authority to direct insurers to return premiums to drivers during highly profitable years and to request rate filings from insurers at any time for review and possible adjustments.
3. Premium Payment Plans: Starting in January 2023, the majority of Albertans will have greater access to pay their insurance premiums through payment plans rather than annually. This change aims to ease financial pressures by allowing better budget management.
4. Exploring Other Insurance Models: The government is also considering many changes to the system to help reduce the cost of insurance which include fraud investigation, changes to the minor injury cap and definitions, reducing lawyer fees and payments, enhanced care models, and benefits to new drivers.
These reforms follow a rate increase pause implemented in January 2023, where the Alberta government froze all rate increases for private passenger vehicle insurance until the end of the year. However, some drivers may still see rate increases due to previously approved changes or alterations in their driving records or insurance profiles.
Our Commitment to You:
As your trusted insurance broker, we are dedicated to helping you navigate these changes and ensure that your coverage meets your needs. We encourage you to stay informed and proactive in understanding your insurance options. We will continue to review and stay apprized to the knowledge and best practices to navigate these upcoming changes.
We are here to assist you with any questions and provide guidance on how these changes might impact your policy. Together, let’s ensure that your auto insurance is both affordable and adequate for your needs.