New report shows auto insurance rates slowly declining in Alberta
CALGARY -- A new report released by LowestRates.ca on Tuesday shows Alberta saw a drop of 3.6 percent in automobile insurance premiums for the first quarter of 2021.
However they still remain nearly 15 percent higher, year over year.
“Now it's reached an equilibrium, or close to reaching an equilibrium where insurance companies want to compete for Alberta drivers business,” said Justin Thouin, co-founder of LowestRates.ca.
Thouin says the removal of a five per cent premium cap on insurance rates from the UCP started the increase of rates nearly two years ago.
The cap was brought in by the previous NDP government.
“It was an unsustainable environment for car insurance under the NDP,” said Thouin.
“Car insurance companies couldn’t make any money. So they were all pulling out, and forcing Alberta drivers, some of them to have to drive without insurance, because they couldn’t find an insurance company that would be willing to insure them.”
Sherif Abdelrahman started driving in Canada in 2019. His insurance rate was a little more than $2,600 annually.
Last November his company asked him to pay an additional $1,000.
“I had no accidents, no demerits nothing and what I got was a 40 percent increase,” he said.
“That was a big thank you from insurance companies to us Albertans.”
The province introduced Bill 41 last year to make it more fair and affordable for consumers.
Fair Alberta said that while the legislation helped, there is still a lot to do when it comes to lowering insurance rates.
“It’s definitely a step in the right direction,” said spokesperson Keith McLaughlin.
“We know that insurance companies continue to share information that is not supported by publicly-available data around their profitability.”
The province says rates will not increase.
“The Automobile Insurance Rate Board (AIRB) regulates auto insurance rates in Alberta,” read a statement from the ministry of finance.
“So far, two insurers have filed for a rate reductions, and we understand that AIRB is not approving further rate increases, unless an application demonstrates a rate change is absolutely necessary.”
“At the end of the day, Alberta has a competitive auto insurance marketplace. Drivers are encouraged to shop around and compare quotes to find best insurance options for their needs and budgets,” read the statement.