Auto insurance rates in Alberta are influenced by a variety of factors. A good part of your rate is determined by your unique driver profile. Here's what makes up your driver profile:
Your driving record - Driving convictions on your record will result in higher rates. If you’re considered a high-risk driver, finding a low car insurance rate in Alberta might be a challenge. Learn more about finding a high-risk car insurance policy here.
Your age and gender - On average, men tend to pay higher car insurance premiums than women. There are exceptions. But demographic data show that men are more likely to die in car accidents, drive under the influence, and are less likely to wear a seatbelt.
Your age - Young drivers looking for car insurance in Alberta also face difficulty, as demographic data shows that inexperienced drivers tend to wind up in more accidents. For this reason, car insurance for new drivers in Alberta is more expensive.
This factor doesn’t only impact young drivers, however. Adults between the ages of 50 and 70 get some of the lowest car insurance rates in Toronto. If you belong to this demographic, you probably have a long history of being insured and you might even have bundled your home insurance policy with the same provider of your auto insurance. After age 70, though, you might see your rate begin to creep up because people in your age group are more statistically more likely to need to file a claim and need longer to recover from an injury. This is why car insurance for seniors in Alberta may also be higher due to a greater likelihood of accidents in that age group.
Your driving experience - In Alberta, the most an insurance company can charge a new driver is $3,163 (for third party and accident benefits coverage). That’s more than double the average provincial premium. Demographic data show that inexperienced drivers — that means less than eight years in Alberta — are more accident-prone. Again, this is why finding cheap car insurance for new drivers in Alberta can be a challenge.
Your insurance history - In addition to having a poor driving history, your insurance history can also play a role in determining your rates. If you’ve filed multiple claims or have a history of missing payments, you may be given a higher rate. Furthermore, new immigrants looking for car insurance in Alberta may also face challenges because they have no Canadian insurance history at all.
Your income level - How much money you make can also impact your car insurance rates. A higher income may indicate to an insurance company that you’re less likely to get behind on payments. This is why students looking for car insurance in Alberta may face challenges securing an affordable rate.
The type of vehicle you drive - The price, make, model, fuel type, and age of a car factor into the final cost of your auto insurance. Sports cars can be the most expensive to insure.
Use and location of your vehicle - Using your car to drive to work will raise your premium. The average work commute is an estimated 30-40 km. The more time you spend on the road, the more likely you are to get into an accident. Also, your rate can increase (or decrease) based on where you park it. Parking it in a private, covered garage will lower your premium.
The amount of coverage you've selected - The more coverage you buy above the mandatory amount, the more your premium will cost. In Alberta, you must own at least $200,000 of third party liability and accident benefits coverage.
There are other factors that contribute to your rate. They are also largely out of your control:
Other drivers - Other customers with the same insurance company can push up the insurer’s loss ratio. Insurance companies pass the cost on to you.
Postal code - Insurance use postal code regions to set car insurance premiums. They look at the number of claims they’ve made out in that area and calculate rates. Drivers from some neighbourhoods are more likely to file claims than others.
High-loss ratios - In late 2019, Alberta auto insurance companies said they paid out $1.12 for every dollar they earned in premiums. This is a major justification for rate increases in Alberta.
Politics - Each new government tries to tackle the problem of rising auto insurance rates. In 2004, the Liberal government introduced the grid system. The NDP government in 2017 imposed a 5% cap on insurance companies who applied to raise premiums. In late 2019, the United Conservative Party removed the 5% cap in favour of allowing the market to set the rates.
