The Alberta Auto Insurance Rate Board (AIRB) is the organization charged with regulating auto insurance premiums in Alberta. Each quarter insurance companies can file requests asking for changes to their rates. The AIRB reviews these requests and approves or deny's them based on "actuarial justification and the insurer’s individual circumstances to ensure insurance is accessible, equitable and sustainable for all Albertans". The decisions have just been released for last quarters filings. Here's what these mean to Alberta motorists.
The rate changes are presented as a percentage increase or decrease in relation to average premium per policy that company took in over the previous quarter. Often times the media will report on these by taking an average of select increases. For example, a headline you may see is: "Insurance Rates are Rising 10% for Alberta Drivers". This is a little misleading, as these percentages are not applied to individual drivers, they are applied to the overall average premium. Some drivers will see an increase, some will not and some will see a decrease.
Auto insurance premiums are calculated based on a number of factors, and each company may have a slightly different weight on some of these factors. These can include things like driving experience, claims history, payment history, location and much more. Each of these factors can influence how the overall rate increase affects an individual driver. The AIRB provides an excellent example for how this may work:
"For example, an insurer was approved for a 10% increase in basic coverage; an adjustment was made to territories; Calgary -4%, Edmonton 0%, Red Deer +12%, etc. For this rate level change, drivers in Calgary would see their premium change by less than the 10% average and Red Deer would see their premium increase by greater than the 10% average. All factors used to determine premium are analyzed and may be adjusted; the sum of these adjustment reflects the change in premium for an individual driver."
Ensuring that rates are affordable is in all of our best interests. Auto insurance is an extremely important things and we believe that auto insurance should be accessible for all drivers. But without the right coverage, your auto insurance may not actually help you (or the the other people injured in an accident) the way you think. The AIRB and IBC and other governing bodies in our industry have been encouraging our clients to "shop around" for the best price a lot lately, but I worry that this could be a dangerous message to convey to consumers who don't necessarily understand how seemingly small differences in policies could affect them drastically in a claims situation.
The phrase "shop around" makes it feel like you can easily get the same product somewhere else and carry on your way. The fact is, if you're getting a much lower price somewhere else there are probably some major differences in coverage that you need to be aware of. If you do find a deal that includes all of the coverage that you need and really can't be passed up, there is a strong chance that this is because the insurance company you're quoting with was denied an increase that quarter and will likely be approved in the next quarter or two.
The key to me with insurance is to work with an expert that you trust. If you are with an insurance broker, they will have access to multiple insurance companies and can make recommendations based on the coverage that they know you need. At Armour Insurance we have a process called Automatic Policy Review. If your premium increases over a threshold your broker is notified and explores options for you. This is done by someone who is a licensed expert, operates a mandate to always "Protect our Policy Holders" and knows you and your file. In our eyes this is a better solution than "shopping around".
Here are the Results
Below is a synopsis of the combined rate changes. View the full AIRB Report here.
Private Passenger Vehicles
|Insurance Company||Approved Rate Change|
|SGI CANADA Insurance Services Ltd.||9.51%**|
|Royal & Sun Alliance Insurance Company of Canada||5.00%**|
|Pembridge Insurance Company||7.37%***|
|The Wawanesa Mutual Insurance Company||5.00%**|
|Chubb Insurance Company of Canada||1.94%|
|Zurich Insurance Company Ltd||-0.87%|
|Pembridge Insurance Company||0.01%**|
|Allstate Insurance Company of Canada||0.39%**|
|Cumis General Insurance Company||0.00%|
|Primmum Insurance Company||0.00%|
|Security National Insurance Company||0.00%|
|TD Home and Auto Insurance Company||0.00%|
|Federal Insurance Company||0.00%|
|Unifund Assurance Company||0.00%|
|Federated Insurance Company of Canada||-1.63%|
|Belair Insurance Company Inc.||-0.49%|
|Mitsui Sumitomo Insurance Company, Limited||N/A*|
|Certas Direct Insurance Company||N/A*|
|Certas Home and Auto Insurance Company||N/A*|
|The Personal Insurance Company||N/A*|
|Belair Insurance Company Inc.||N/A*|
Commercial and Interurban Vehicles
|Insurance Company||Category||Approved Rate Change|
|Intact Insurance Company||Interurban Vehicles||9.99%**|
|Royal & Sun Alliance Insurance Company of Canada||Commercial Vehicles||9.76%**|
|The Wawanesa Mutual Insurance Company||Commercial Vehicles||9.51%**|
|Co-operators General Insurance Company||Commercial Vehicles||9.05%**|
|Economical Mutual Insurance Company||Commercial Vehicles||6.36%**|
|Intact Insurance Company||Commercial Vehicles||4.96%**|
|Federated Insurance Company of Canada||Commercial Vehicles||1.65%**|
|Aviva Insurance Company of Canada||Interurban Vehicles||0.00%|
|Aviva Insurance Company of Canada||Commercial Vehicles||0.00%|
|Facility Association||Commercial Vehicles||N/A*|
|Certas Home and Auto Insurance Company||Commercial Vehicles||N/A*|
|Insurance Company||Category||Approved Rate Change|
|Allstate Insurance Company of Canada||Motorhomes||10.00%|
|Pembridge Insurance Company||Motorhomes||10.00%|
|Aviva General Insurance Company||Motorcycles||-0.81%|
|Aviva Insurance Company of Canada||Motorcycles||-1.06%|
|Traders General Insurance Company||Motorcycles||-1.22%|
|Federated Insurance Company of Canada||Motorcycles||0.03%|
|Federated Insurance Company of Canada||Trailers & Campers||-0.01%|
|Federated Insurance Company of Canada||All-Terrain Vehicles||0.00%|
|Federated Insurance Company of Canada||Antique Vehicles||-20.77%|
|Federated Insurance Company of Canada||Snow Vehicles||-0.03%|
|Federated Insurance Company of Canada||Trailers & Campers||-12.66%|
|Federated Insurance Company of Canada||Motorhomes||0.11%|
|Northbridge General Insurance Corporation||Public Buses||N/A*|
|Northbridge General Insurance Corporation||Private Buses||N/A*|
|Northbridge General Insurance Corporation||Ambulances||N/A*|
|Northbridge General Insurance Corporation||School Buses||N/A*|
|Northbridge General Insurance Corporation||Taxis & Limousines||N/A*|
|Northbridge General Insurance Corporation||Hotel & Country Club||N/A*|
|Tokio Marine & Nichido Fire Insurance Co., Ltd.||Hotel & Country Club||N/A*|
|Tokio Marine & Nichido Fire Insurance Co., Ltd.||Ambulances||N/A*|
|Tokio Marine & Nichido Fire Insurance Co., Ltd.||Public Buses||N/A*|
|Tokio Marine & Nichido Fire Insurance Co., Ltd.||Private Buses||N/A*|
|Tokio Marine & Nichido Fire Insurance Co., Ltd.||School Buses||N/A*|
|Tokio Marine & Nichido Fire Insurance Co., Ltd.||Taxis & Limousines||N/A*|
* N/A refers to any filing submitted which does not result in a change in premium level.
**Approved prior to October 29, 2020 legislative change announcements.
***Implementation delayed from May 28, 2020 due to COVID-19.