Auto Insurance

Alberta auto insurers turning away drivers convicted of distracted driving

By: Lisa Coxon on October 1, 2019

Drivers in Alberta who have been convicted of distracted driving are finding it harder and harder to get affordable auto insurance and in some cases, get full-coverage insurance at all, according to brokers in the province.

According to the CBC, when Derek Johnson and his wife went to renew their insurance with Action Insurance Group in early September, the Edmonton couple was told that because of Derek’s distracted driving ticket a year earlier, no companies were willing to offer them comprehensive and collision coverage.

Derek’s wife, Miranda, received the following message from their broker Adam Kluczewski: “Sorry, I don't have any other options with that conviction. Companies are really cracking down on distracted driving. I even called a couple to see if they would bend and none of them will.”

Collision coverage is optional in Alberta, and insurance companies are only required to offer liability and accident benefits as part of their policies.

When CBC News reached out to Armour Insurance, MBS Insurance Brokers and HDF Insurance — all Edmonton brokerages — to find out how a distracted driving ticket might affect someone’s ability to obtain auto insurance in Alberta, it learned that both Armour and MBS have had to turn clients down for full coverage because they had distracted driving convictions.

“It's created a bit of a hard market for consumers,” Armour Insurance CEO Rob Marusin told CBC News.

For those insurance companies that do take on people with distracted driving convictions, they might require the driver to pay the annual premium upfront as a lump sum, as opposed to monthly installments.

“We try and help everyone,” said Marusin, “but right now … we unfortunately are having to turn people away because they maybe can't afford to pay the full premium for the year.”

Other insurance companies might still offer full coverage, but will increase the convicted driver’s premiums significantly.

Greta Gerstner, who works as a customer service representative at MBS Insurance, told CBC News that she received a distracted driving ticket in June 2017 for plugging in her cell phone at a red light. When she went to renew her auto insurance with Wawanesa, it increased her premiums by 15%.

According to a recent Desjardins survey, more than 50% of Canadians admit to being distracted by their cell phones while driving.

Some think the crackdown by Alberta’s insurance companies on distracted driving convictions might have something to do with the 5% rate cap auto insurance companies in the province were facing up until the end of August, when the cap expired and the government chose not to renew it.

“After annual rate increases were capped at five per cent in late 2017, we learned that some insurance companies were taking steps to limit their business as a way of minimizing their losses,” Jerrica Goodwin, press secretary at Alberta Treasury Board and Finance, told CBC News.

“I think that was creating some problems for them,” George Hodgson, CEO of the Insurance Brokers Association of Alberta, told CBC News. “So this was one solution — albeit imperfect solution — but it was one solution that I believe some [companies] are undertaking.”