10 Ways to Lower Your Car Insurance Rates in Alberta

Rear View Of Couple On Road Trip Driving Classic Convertible Car Towards Sunset

You’ve probably noticed an increase in your car insurance rates in Alberta over the last few years. Unfortunately, vehicles are more expensive than ever to repair and there are still a large number of crashes, especially in Calgary and Edmonton. So what can you do to lower your car insurance rates in Alberta? While you might not be able to control your premiums entirely, there are some things you can do to keep your car insurance rates as low as possible. This includes:

  1. Only submit a claim when necessary.
  2. Drive safely and follow the rules.
  3. Drive less.
  4. Try to avoid missing payments.
  5. Try not to switch insurers too frequently.
  6. Remain insured.
  7. Raise your deductible
  8. Install anti-theft devices.
  9. Equip your vehicle with winter tires.
  10. Bundle your insurance.

 

1. Only submit a claim when necessary.

Car insurance is supposed to be for huge, catastrophic events that you couldn’t pay for on your own. Unfortunately, many people make an insurance claim even if the damage isn’t that severe. This increases insurance costs for everyone. If you can afford to repair the vehicle yourself or it’s just above the cost of your deductible, you shouldn’t submit a claim. Talk to your insurance broker if you’re not sure what to do.

2. Drive safely and follow the rules.

It’s far too easy to be an aggressive driver or to tailgate or speed. But this is exactly why there are so many collisions in Calgary and Edmonton – especially during poor driving conditions. Be patient, drive defensively, and always leave enough space between you and the car in front.

3. Drive less.

Did you know that you pay more the more you drive your car? If you commute, you’re also likely paying more as most accidents happen during rush hour. To save money on your insurance, opt for public transit, carpooling, or using your own two feet to get to work. Of course, this isn’t always possible. Transportation options are often limited and our extreme weather makes it difficult to get to work without a vehicle. However, you can still try to save money by driving less.

4. Try to avoid missing payments.

Unfortunately, missing payments generally means you’ll have more to pay down the road. It’s a catch-22. Try to avoid missing payments by putting a reminder in your calendar or turning on auto withdrawal. If you know you’re going to miss a payment, contact your broker or insurance company.

5. Don’t switch insurers too frequently.

It used to be that switching insurers got you the lowest rates. This can be true, but you may also find your rates go up after the first year or the new business discount has been replaced by a loyalty discount. Discuss your options with an insurance broker – they can help you determine if it’s really in your best financial interest to switch insurers.

6. Remain insured.

If it’s possible, remain insured. Even if you just have the minimum third party liability coverage required by law in Alberta. While this won’t offer much protection for you, it will help keep your insurance rates lower (plus, you’re mandated by law in Alberta to have a certain amount of third party liability protection).

7. Raise your deductible.

Raising your deductible will lower your car insurance rates. While you will need to pay more upfront in the event of a covered claim, you’ll save over the long term. Your broker can help you determine the right deductible for you.

8. Install anti-theft devices.

Some insurance companies provide discounts for security and anti-theft devices. Talk to your broker for more details.

9. Equip your vehicle with winter tires.

Winter tires make your vehicle safer to drive in winter. This is one reason Quebec and BC require winter tires on all vehicles for certain months of the year. While this can be expensive, you can find good deals on winter tires. Switching your tires at the right time also helps ensure their longevity.

10. Bundle your insurance.

Insurance companies often offer discounts for multi-vehicle policies as well as if you bundle your car insurance policy with other types of insurance such as home and business insurance.

Your broker is your best resource for saving money on your car insurance rates in Alberta. Talk to them today about how you can save and what your insurance options are.

The 5 Biggest Reasons Alberta Auto Insurance Rates Are Increasing

A variety of models of black and white cars parked end to end, filling the frame.

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.