Alberta has a private auto insurance market, but the provincial government regulates prices. The two agencies responsible for overseeing car insurance rates are the Automobile Insurance Rate Board (AIRB) and the Office of the Superintendent of Insurance.
The system that Alberta uses to calculate car insurance premiums is unique to the rest of Canada.
Auto insurance companies in Alberta follow a grid system to determine premiums. The province created the grid to keep car insurance affordable. It establishes the highest premium insurance companies can charge for basic coverage (third party liability and accident benefits).
The grid accounts for where you live, how many years you've held your licence, the number of claims you've had in the last six years, as well as the number of driving convictions on your record.
The grid isn't used to set the price of optional auto insurance coverages, like comprehensive, collision, and all-perils insurance.
Here’s what else you need to know about how the grid system and how insurance companies use it:
When calculating insurance, companies have to compare their premium with the grid. They must charge the lesser of the two premiums.
This rule doesn't apply if you’ve had a driving or criminal conviction within the last three years, three or more at-fault claims within the last six years, or you’ve been convicted of insurance fraud).
Premiums for drivers who remain claims-free and free of traffic tickets will decrease over time.
For each year without an at-fault claim, premiums can decrease by anywhere between 5% to 50%.
Inexperienced drivers who have completed a driver’s ed course start 10% below the maximum entry-level premium ($3,163).
Each at-fault claim moves the driver up five rungs on the grid. It also results in extra surcharges (the same applies if you have a driving conviction).
Car insurance companies in Alberta must apply to AIRB for permission to raise rates across the board.
In 2017, the province barred insurance companies from raising premiums beyond 5%.
But, big changes are in store for Alberta drivers.
In late 2019, the 5% cap got scrapped. Customers are already seeing the effects of this decision in the form of higher auto insurance rates. AIRB approved 30% rate increases for some insurers.
Despite regulatory controls, Alberta auto insurance rates can vary. That’s why it’s important to compare insurance companies.