A recent report by Ernst & Young (EY) found Alberta has some of the highest auto insurance premiums in the country.
The review looked at 30 different driver profiles, including different cars to different ages and levels of driving experience, to compare what those drivers would pay in nine different provinces.
For example, the report found that an 18-year-old driving a 2021 Honda Civic LX with a novice license would pay $5,936 a year in Alberta, while paying just $1,129 in Saskatchewan.
EY used Calgary, Edmonton, Red Deer and Grande Prairie to represent Alberta in its report, which can be viewed here.
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“Albertans are being squeezed as they struggle to keep their car on the road and food on their table amid an affordability crisis,” said Shannon Phillips, opposition finance critic. “They pay thousands of dollars more per year than other counties for the same level of insurance.
“This is highway robbery, but rather than addressing it, the UCP (government) is allowing big insurance companies to charge as much as they want.”
John Shmuel, managing editor at PRICEDOTCA, said the NDP’s insurance cap isn’t all positive for insurers in Alberta’s private system, and he’s not entirely surprised to see these numbers.
“Insurance companies have talked about losing money in Alberta,” he said.
“We’ve actually seen insurance companies pull out of Alberta because they felt they couldn’t price their insurance based on the amount they were paying out in costs.”
Getting back in the driver’s seat when it comes to insurance rate increases
Shmuel said it was hard to say whether the high prices were just companies “catching up” after the cap was lifted, but he pointed to several factors that hurt their ability to make a profit, such as the high costs of law and health fees.
“Which in turn leads to increased costs for consumers,” he explained. “Can we cut out some of the middlemen and connect drivers more directly with the services they need if they are injured in an accident?
“I don’t think anyone is happy to see high insurance prices for consumers, especially now with inflation.”
A statement from Finance Minister Travis Toews said he believes Albertans are getting better auto insurance coverage because of changes from the UCP government.
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“As a result of our actions with Bill 41, Alberta drivers have seen improvements such as stabilized rates, increased insurance options and flexibility. Albertans injured in traffic accidents now have access to more health professionals, such as dentists and psychologists, through their insurance claim,” she said in a statement. “Amounts for bereavement counselling, income replacement and funeral benefits are now adjusted for inflation.
“The 12-month change in insurance premiums from the end of November this year is also 2.4 per cent. This is less than half of what it would have been under the NDP rate cap.”
Regardless of where someone lives in Canada or what they drive, Shmuel said drivers can have some leverage in what they pay by shopping around after renewal, looking at bundle options and advising their insurance companies if the length of their commute changes.
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