The 5 Biggest Reasons Alberta Auto Insurance Rates Are Increasing

J.D Power’s 2019 Canada Auto Insurance Satisfaction Study released on February 14, 2019, stated that Alberta has seen the largest jump in its average for increases in car insurance rates, coming in at $326. This was, shockingly, even higher than the national average – which has increased by $298! These rising rates can result in a considerable amount of dissatisfaction and confusion among Albertans. It leaves a number of us wondering: why are Alberta auto insurance rates increasing?

The 3 biggest reasons Alberta auto insurance rates are going up are:

1. The inflation of the cost of accidents (due to repairs and liability).
2. The increase in the frequency of accidents.
3. A rise in natural disasters and weather damage.
4. The upturn of insurance fraud taking place.
5. Vehicle theft is surging.

Inflation in the Costs of Accidents in Alberta

The cost of having an accident in Alberta has been increasing year over year. The 2018 Collision Cost Study Update showed that the direct cost of collisions increased by an average of 25% between 2010 and 2017. This includes the costs of property damage, medical care, emergency services,  legal services, travel delay and lost time in the workplace.

The cost of repairs is increasing for several reasons:

• A rise in the cost of materials
• Increasing labour costs
• The presence of more technology on vehicles such as sensors, cameras, et cetera

More and more vehicles are using electronics and upgraded materials. While this is excellent for your safety and daily driving, it becomes more expensive to replace or repair in the event of an accident. Generally, materials and labour costs are also increasing.

There’s the added complication of liability. This covers property damage and bodily injuries. While some medical care may be covered by the provincial health care system and an employer health care plan, there may be additional expenses that you can be held liable for. Your liability insurance could cover these expenses, up to your policy limit. These costs can be high, however, especially if the accident is serious.

In 2019, the Government of Alberta also introduced a limitation on the amount of payment for claims of minor injury known as the “minor injury cap,” which applies to all injuries sustained in accidents that fall under the category of minor soft tissue and minor sprain and strain injuries. With this, they finalized a set price for liability-only auto insurance and introduced a 5% accumulative rate increase limit.

Increasing Frequency of Accidents

Calgary and Edmonton have seen an increase, especially over the last two years. Distracted driving is one of the top contributors to collisions in Alberta. Between 23,000 and 27,000 distracted driving convictions have been made on Alberta’s roads each year between 2014 and 2018. With the inflating costs of accidents, this means insurance companies are paying out more money more frequently.

A Rise in Natural Disasters and Weather Damage

Bad weather causes a huge spike in accidents on the road. Storms can cause flash flooding and low visibility, which can in turn cause collisions. In the winter, it’s even worse as visibility and road conditions can become extremely poor. In April 2019, a spring snowstorm caused nearly 150 incidents on Calgary’s roads.

Natural disasters such as flooding and wildfires have also been prevalent in Alberta over the last decade. Many vehicles are left behind and are damaged or destroyed.

An Increase in Insurance Fraud

Insurance fraud is very common and costs Canadians over $2 billion a year, according to Aviva. Here are some common types of insurance fraud:

• Lying, misrepresentation or failure to notify on an insurance application or claim.
• Fake insurance paperwork such as pink cards.
• Unlicensed insurance representatives “issuing” insurance policies.
• Intentional acts to damage a vehicle.
• Exaggeration of damage or costs such as legal or medical.

Vehicle Theft in Alberta

Alberta is leading Canada in vehicle thefts with over 23,000 cars being stolen each year. While not all drivers carry insurance to reimburse them for vehicle theft, many do and this has left insurers paying out more and more.

Alberta auto insurance rates are increasing?

 

Taking all this into account, it is no wonder that the Alberta auto insurance industry is raising rates in order to pay out for these claims as well as maintain themselves as a business. There is currently a cap on the amount Alberta auto insurers can raise their rates: 5% total overall. There is also a cap on liability insurance costs.

You may experience the following actions from insurers:

• Eliminating discounts on insurance
• Decreasing payment method options
• Raising comprehensive and collision coverage prices
• Removing their services from the province
• Re-application required for renewals

Unfortunately, many of these factors are out of our control. We can practice safe driving, reduce our time spent behind the wheel, protect against theft, and be informed on insurance fraud… but these issues aren’t about one person. We understand it can be frustrating to see Alberta auto insurance rates increase, especially when you’ve got a clean driving record and are claims-free. Contact your insurance broker for more information on what affects your rates and how you can reduce your premiums.

Let’s face it, we’re always looking for ways to have a little extra cash in our pocket. At Sharp, we’re committed to finding the insurance policy that works for you, at the best price. Why pay more for the same coverage, when you can pay less?

Here are our top 10, nearly foolproof, ways you can save on your car insurance.

1. Bring your policy to Sharp and save 5% – guaranteed*

If we told you we could guarantee you cheaper insurance rates for the same level of coverage, what would you say? On your next renewal, bring your insurance needs to Sharp and we will beat any new customer’s insurance premium by 5% – that’s the Sharp Guarantee. *Eligible policies must be with Intact, Aviva, RSA or additional participating markets. Get a free, no obligation quote today.

2. Bundle and save up to 20%

Insurance can sometimes be complicated, so why not simplify it and save money at the same time? By bundling multiple policies, like your home and car insurance, you pay only one premium, have one renewal date and in the event of a loss involving both your car and your home you only pay one deductible. Start your multi-product insurance quote here.

3. Enroll in Usage-Based Insurance (UBI) aka Telematics

When it comes to the data on your phone or your lunch at the salad bar, you’re only paying for what you use. You can get that same benefit with your car insurance by enrolling in a usage-based insurance (UBI) or telematics program through participating insurance companies. This can save you up to 10% in the first year.

What is UBI or telematics?

Did you know your car is built for a device that can track and transmit information about your driving skills such as hard braking, speed, distance and the times of day you travel most?   A small removable device that gathers data, can be installed in your vehicle to rate your insurance premium based on your driving skills rather than demographic generalizations. Inevitably, having this device track your good and bad driving habits will prompt you to be more aware on the road which will help increase safety precautions for you and others on the road. If you think you’re a fantastic driver, then this device could mean big savings for you. Additionally, should you make some not great driving choices, your premium cannot be increased. 

4. Raise your deductible

Deductible – [dih-duhk-tuh-buh l]. $250, $500, $1,000 – no matter the amount, your deductible is the amount you are responsible for paying before your insurance coverage kicks in to pay for the remainder of the damage in the event of a claim. You can save money on your insurance by increasing your deductible amount. While this could save you money in the long-term, it’s important to be aware that you will be responsible for paying a higher amount towards claim costs and be financially prepared.

BONUS TIP: Consider saving your deductible amount in a high-interest e-savings account. Then you’ll have it on-hand should you need it, and you will be earning interest on it as well.

5. Pay your premium annually

Many of us pay our insurance premiums monthly. However, some insurance companies – including several we work with – will offer discounts if you pay your premium up front. You could save up to 4% by paying your premium annually. Talk to your Sharp Insurance broker to determine if this is right for you.

6. Enroll in driver’s education

From an insurance perspective, young or inexperienced drivers (less than 3 years’ experience) are more at risk of filing a claim- that is why their insurance costs are generally higher. By enrolling in driver training, you’re gaining experience that helps you become a better and safer driver – lowering the likelihood of having a claim – and ultimately lowering your premiums as well.

7. Install an anti-theft device

According to Statistics Canada, Alberta leads the country in vehicle thefts, with almost 23,000 vehicles stolen every year. That works out to roughly 60 vehicles per day.

 

Some insurance companies will provide discounts on your car insurance when you provide proof of installation. Furthermore, in the event your vehicle is stolen, the fact that you have an anti-theft device installed may result in your insurance company offering you a reduced deductible.

The three types of anti-theft devices on the market include:

• Passive: an anti-theft system that automatically protects your vehicle. They are often built into your car and arm themselves when the vehicle is turned off, the key is removed and the door is shut.
• Active: an anti-theft system that you need to enable to work. These include things like a steering wheel Club® or a car alarm that needs to be manually armed.
• Auto immobilizers: one of the most effective types of anti-theft device for your vehicle. They prevent the car from being started unless a specifically coded key is used.

Not all anti-theft devices are eligible for insurance discounts. Before you install anything in your vehicle, speak to your Sharp Insurance broker.

8. Practice safe driving

As of September 1, 2011, distracted driving became illegal in Alberta. In 2017 in Edmonton alone, police issued over 7,400 distracted driving tickets. That’s an average of 20 tickets per day. Across Alberta in 2017, there were over 24,000 distracted driving convictions, according to data from the provincial government.

Insurance companies take into account the number and type of traffic violations as well as the number of at fault collisions when determining your insurance premium. By keeping your eyes on the road, following traffic laws and going the speed limit, your likelihood of getting into a collision reduces significantly, and you may just be rewarded with insurance discounts.

9. Group and Professional discounts

If your employer or professional association is a member of Sharp’s Group Home and Auto Insurance program you’ll benefit from exclusive discounts on insurance, 24-7 insurance access and service, 24-7 claims support and payment flexibility. Learn more about our group insurance program and how to register your organization here.

10. Talk to a Sharp Insurance broker

Insurance can be confusing and complicated. Let us do the work for you! Whether you need to insure a single vehicle, or the whole family fleet, we’re ready to help you find the coverage to protect your ride.

Our team of experts will find you customizable coverage with a policy that fits your needs. We partner with the top insurance companies in Canada to provide you with excellent options at the best value.

A quote from Sharp Insurance is always fast and free. What are you waiting for? Start your wicked fast insurance quote today.