In a bid to curb the escalating auto insurance costs, the Alberta government has announced potential reforms. However, these proposals have been met with criticism from the Official Opposition, who contend that such changes offer minimal relief for drivers burdened by significant premiums.
Nate Horner, the Finance Minister, declared that from the start of the New Year, drivers maintaining an exemplary record will not see their premiums hiked beyond September’s inflation rate of 3.7 per cent.
He stated at a Wednesday press conference: “Our government remains unwaveringly committed to rendering auto insurance not solely affordable, but also sustainable and reasonable for both drivers and insurers in Alberta.”
The pledged reforms are accompanying the province’s move to end the freeze on auto insurance rate increases by the close of the year. This freeze was implemented in the preceding January to alleviate the burden on Alberta drivers who were grappling with some of Canada’s highest premiums.
Eligibility to be classified as a ‘good driver’ hinges on a record devoid of one or more at-fault accidents over the past six years, freedom from criminal traffic infraction convictions within the past four years, and an absence of major traffic or more than one minor traffic conviction in the last three years. Major transgressions include speeding in a school zone, distracted driving, excess speed of over 50 kilometres per hour above the posted limit, or failure to remain at a collision site, whereas minor offences encompass additional speeding tickets and failure to comply with yield or stop signs.
Horner admitted he was uncertain of the proportion of Alberta drivers who would meet these criteria, yet expressed his confidence that the majority of residents would qualify.
Distilling the aftermath of the COVID-19 pandemic, Horner noted that reduced vehicular activity boosted insurance company profits, exceeding the Auto Insurance Rate Board’s set benchmark. As a result, he stated further adjustments were warranted.
In response to this, the province is considering empowering the rate board to mandate insurers to return a percentage of premiums to drivers during profitable years, and grant them the jurisdiction to enforce lower rates if existing ones are deemed unreasonable.
Christina Gray, the Opposition NDP house leader, voiced her scepticism, asserting that the proposed changes— although appearing extensive— offer limited actual relief. Gray further argued that the definition of a ‘good driver’ was excessively stringent, potentially excluding a majority of drivers.
Additionally, she pointed out the lack of clear benchmarks outlining when the newly authorized power of the rate board should be utilised.
The province has also sought a third-party report on long-term reforms for the insurance system. Anticipation surrounds the pending release of a draft report by year-end and a subsequent final report in the following spring.
As this is unfolding, Albertan drivers await reassurance that their voices have been heard and their pockets will finally be granted some reprieve.
