Alberta’s introduction of a cap on the cost of liability-only vehicle insurance has insurance companies mitigating their financial risk by increasing other rates and pricing some drivers out of coverage.

“The government meant well,” explained Lance Miller, CEO of Surex Insurance. “They’re trying to protect Albertans from high increasing costs in insurance. The problem was the stance they took has created an environment that is endangering Albertans.”

Miller says his company places about $1 million in new business each month, primarily automotive, and roughly 40 per cent of the people who call for insurance are deemed to be too great of a risk, given the province’s cap, and denied coverage. Consumers who are financing vehicles are even more likely to be turned away.

“Insurance companies are filtering business such that if you’re considered a mid to high risk they are withholding collision, withholding comprehensive coverage, and not giving payment plans,” said Miller. “Unless you own your vehicle, you need those coverages.”

According to Miller, the cost of claims is rising, as litigation costs increase and technology in vehicles advances, and the cost is outpacing the premiums charged. The end result is a filtering of potential customers.

“Right now, most companies, for every $1 they collect in premiums, they’re paying out every year up to $1.70,” said Miller. “ So it’s not that they’re taking less, they’re actually going in the hole and that’s why insurance companies are saying ‘Look, this is non-sustainable. We just can’t do this.’ Therefore they’re just refusing to write business.”

“Unless you’re a squeaky clean risk, we don’t want you.”

The legislation says insurance companies must provide liability coverage but does not prevent the withholding of collision or comprehensive coverage.

Miller says the lack of insurance coverage does not eliminate the need for transportation. “They’ve got jobs to get to, they’ve got children to get to school. They’re out there driving and they’re uninsured,” warned Miller. “That is a growing population on our roads. If you get hit by one of them and they don’t have insurance, you’re now at risk.”

“It endangers Albertans.”

Edmontonians Francis and Carolyn Lajeunesse expected their insurance rates would increase following two minor claims, each under $2,000, in 2017 but their jaws dropped when they discovered insurance on the car had jumped to over $15,000 a year, an increase of more than $10,000.

“It’s going to be over $1,300,”  Francis recalled the news of the rate. “I said ‘A month?’.”

The Lajeunesses shopped around for a better rate but their search was unfruitful. Other insurance companies offered similar or higher rates and some required a full year’s payment up front. The couple have begun looking for extra work to help cover their insurance costs.

“Now we’re paying $900 more a month and we have four kids,” said Francis. “It’s tough.”

“You can’t justify paying that much but, at the end of the day, it’s something you have to have,” added Carolyn. “ It’s not even cutting back on elaborate things. We’re cutting backs on necessities.”

The CEO of Surex Insurance says there is little reason for consumer optimism as some major insurance companies are considering pulling out of Alberta, a move that would decrease competition and likely increase rates further.  “The government needs to remove the cap.”

Officials with Alberta’s Ministry of Finance say they are aware of concerns within the insurance industry.

“Our government is working with industry to keep auto insurance affordable and accessible for Albertans,” said Mike Brown, spokesperson for Minister of Finance Joe Ceci, in a statement to CTV. “We are aware of industry’s concerns about increasing cost pressures. We will continue to work with them to find long-term solutions.”

The provincial government says its ‘all-comers’ rule requires insurance companies to provide basic third party liability and accident benefits coverage. Albertans who are having difficulty obtaining basic auto insurance are encouraged to contact Alberta’s Superintendent of Insurance at 780-427-8322.

With files from CTV's Alesia Fieldberg