By CRM staff
Toronto, Ontario -- May 16, 2019 -- The Insurance Bureau of Canada believes that drivers in Alberta are going to have some issues with their auto insurance due to a piece of legislation that puts a cap on premiums.
IBC told Global News that the five percent cap on auto insurance rate increases implemented by the previous NDP government is hurting insurers and drivers.
“Right now, we have a very unhealthy market here in Alberta,” IBC Western Canada vice president Celyeste Power told Global News. “Claims costs have been spiraling out of control for the past few years. Insurers are losing up to $0.30 on every single dollar that they’re bringing in.”
The cap may have seemed like a good idea for everyone at the time, but IBC says that the industry isn’t gaining any profit through its investments.
According to LowestRates.ca, capping premiums to save Alberta drivers money has discouraged competition and resulted in a 11 percent increase in rates.
As a course of action, IBC sent a letter to the Alberta premier outlining the issues that drivers, brokers and agents are facing, Global News reported.
“That’s something that we’re certainly concerned about,” Jason Kenney said in response to the letter. “I’d be happy to sit with the insurance bureau and discuss that.