Alberta car has a few interesting distinctions between how they run their car insurance industry, and how other provinces operate. We wanted to shine some light on 5 insurance things that may be valuable to know. This will include information on privately run car insurance, the regulation in the industry, and other important information on the industry.
Alberta Car Insurance is Privately Run
Unlike their neighboring provinces of British Columbia and Saskatchewan, Alberta car insurance is a privately run industry. British Columbia has ICBC (Insurance Corporation of British Columbia) and Saskatchewan has SGI (Saskatchewan Government Insurance). Alberta has multiple insurance companies that write car insurance, some of these include but are not limited to:
- Intact
- Economical
- SGI Canada (separate from SGI)
- Aviva
- Wawanesa
- Peace Hills
- Travelers
- Many others
With so many companies competing in the same market, insurance companies need to compete with one another for limited business. In order to do this, they offer different coverage options, different programs, and have different rates. Each company has unique features and advantages that make them better for certain customers.
With the many different coverage options available in Alberta, it can be difficult to find the best coverage for the best price. Brokerages like Armour Insurance have highly trained and experienced insurance professionals that stay up to date on all the company coverages and advantages. Having someone who knows the products and coverages in your corner can help you get the coverage you need at the price you deserve.
Alberta Car Insurance Is Heavily Regulated
While Alberta is privately run, it is not to say that it isn’t subject to government oversight. Alberta does hold drivers partly accountable for their own insurance needs. They mandate that drivers maintain at minimum $200,000 in third party liability insurance, have their vehicles registered, and obey the rules of the road.
Insurance companies are under much stricter requirements than individuals. The Alberta Insurance Council or AIC is an industry funded regulatory body that oversees professional qualifications, licensing and regulation of agents, brokers, and independent adjusters. As an industry funded regulator, they operate at no cost to the taxpayer and have a duty to put the best interest of Albertan’s first.
Alberta car insurance premiums are regulated by the Alberta Automobile Insurance Rate Board or AIRB. The AIRB is responsible for approving all rating programs for insurance companies selling car insurance in Alberta. The AIRB works with insurance companies to assess their circumstances and ensure there is a competitive marketplace. They also work to ensure that Albertan’s have accessible, equitable, and sustainable car insurance. The AIRB is responsible for approving rate increases and rate freezes.
In addition to the AIRB and the AIC, insurance providers in Alberta also answer to the Insurance Institute of Canada, the Insurance Bureau of Canada, and the Insurance Brokers Association of Alberta. Needless to say, Alberta car insurance is heavily regulated.
Alberta is NOT No-Fault Insurance
On January 1, 2022, the Alberta government adopted the DCPD (Direct Compensation for Property Damage) system for car insurance claims. Prior to this, if you were in a not-at-fault accident, you would need to make a claim through the other person’s insurance company. This created some unnecessary middlemen and added additional expenses and time to the claims process.
With DCPD, regardless of who is at fault in an accident, you’ll make a claim through your own insurance company to repair the damages. Full information about DCPD is available here. Despite Alberta implementing DCPD for car insurance, it does not mean that Alberta has a no-fault system.
Drivers found to be at-fault in a collision will see a rise in their insurance premiums (unless they have an accident forgiveness endorsement). No-fault insurance would imply that outside of your car insurance deductible, there would be no financial repercussion for an at-fault claim, this simply is not true.
How Inflation Has Impacted Alberta Car Insurance
In June 2022, Alberta’s inflation rate increased to 8.4%. Auto insurance claims have also seen a sharp increase in price, resulting from inflation. The AIRB reported that the cost of replacement parts had increased 16% and the labour costs of collision repairs had increased 49%. Additionally, with a shortage of skilled labourers able to repair collision damage, this has led to claims taking more time to process and longer lead times for rental vehicles. All of this has resulted in claims costing insurance companies significantly more, and those subsequent costs come back to the consumer. More information about insurance inflation is available here.
As inflation continues to impact insurance premiums, the Alberta government did implement a rate freeze until the end of 2023. Once the freeze is lifted in December 2023, insurance companies will likely choose to increase their premiums to account for the rising prices. If you're an Armour Insurance client, we automatically review your policy before the end of the policy term. If their has been a significant increase in insurance premiums, we can requote your insurance with a new market to try and get you a better rate.
You Can Have Your Proof of Insurance on Your Phone
Most Albertan's know that as a driver, you are required to keep a proof of insurance in your vehicle. Most people carry around their proof of insurance in a small plastic folder with their registration and pink card together. While these are still perfectly acceptable ways to keep your proof of insurance, digital pink cards are also acceptable for use.
If you're an Armour Insurance client you can use the Armour Insurance App to access your pink card. You can also review your coverages, make changes to drivers, get your brokers contact information, and even start a car insurance claim right through the app. If you're an Intact Insurance client, you can use the Intact Insurance App to access your pink card too.
Conclusion
In conclusion, Alberta car insurance has some unique elements that make it different from other provinces in Canada. Working with a broker can help you navigate the complexities of the private insurance system with different products and coverage options. Having your brokerage be Armour Insurance gets access to the Armour App, automatic policy review, and an insurance expert to help you when you need it.
If you're looking for an auto insurance quote or more information, give us a call.
