As many may be aware, the province of Alberta has announced a “pause” on private passenger auto insurance rate increases, effective January 25, 2023 and expected to remain in force until at least the end of the year.
The first thing to pop into mind is, “How does this affect my policy?” As your broker representative, we would like to say that this means your rates are fixed at the same price you paid last year. However, a pause in the approval of rate increases is not something you will realize on this year’s individual policies. It directly means, insurance companies can not apply to the Alberta Insurance Rate Board (AIRB) for rate increases this year.
There are numerous factors that contribute to the pricing of individual policies, and the decision to pause future rate increases only affects the ability of the insurance companies to increase their overall base rates.
With this in mind, we have put together a few pieces of information we hope will assist you in understanding the actions of the Government, along with what to expect for your own policies.
- The rate pause announced means the province has advised that insurance companies are not able to apply for rate increases from that date forward. Any rate increases already approved prior to that date will be realized on your upcoming renewals.
- The province of Alberta already utilizes a system called GRID to cap the maximum chargeable rates for liability premiums. The AIRB has already implemented a 10% increase this year for GRID rated autos.
- Changes to driving records such as new tickets or accidents will continue to affect cost of your insurance coverage.
- Changes in the vehicle that you drive, or the use of your vehicle will continue to affect cost of your insurance coverage.
- On a positive note, the above factors could also cause a reduction in your annual insurance costs. If your driving record improves, your use of the vehicle changes, or the coverage you require decreases, could result in lower insurance rates.
The best way to manage your policy premium and coverage is to work closely with your broker. We are here to help find the best coverage at the best price we can offer. Please reach out with further questions or concerns regarding your insurance policy.
I am happy to see that stakeholders such as government, insurance companies, and brokers are working together to find ways to reduce the cost of auto insurance. Now, more than ever, we need all groups, such as auto injury lawyers, fraud investigators, medical professionals, and law authorities, to partake in a finding a win/win solution that will illicit long term rate stability with effective treatment over cash results that will benefit all Albertans.
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