Edmonton, Alberta — It looks like many Alberta drivers will soon pay more to insure their vehicles, according to a recent bulletin from Aviva Canada.
In a recent bulletin sent to brokers, auto insurer Aviva Canada said there could be widespread hikes of 15 percent beginning in January 2020.
“We’re increasing private passenger vehicle rates in Alberta effective January 1, 2020, for new business and renewals,” reads the bulletin. “The overall average rate increase impact is an additional 15 percent for Aviva and an additional 14.1 percent for Traders. In addition, the Alberta Insurance Rate Board has also announced an overall GRID rate increase of plus 15 percent for private passenger vehicles in Alberta.”
Moreover, the Insurance Bureau of Canada (IBC) declined to share how many other Alberta insurers have also applied for rate changes but added there a number of them.
IBC’s western vice president Celyeste Power says the province has no choice, considering how claims have been rising across Alberta. She said the increases are due to a number of factors, including the expense of high-tech repairs, the rise of distracted driving and Alberta’s changing weather.
Power also said insurers have been losing about 12 cents on every dollar, which has resulted in about $2 billion in underwriting losses in the past five years.
In 2017, Alberta’s then-NDP government imposed a five percent rate cap on increases to auto insurance. When that policy expired in August, the current United Conservative provincial government chose not to renew it.
“The five percent rate cap imposed by the previous government may have seemed like a simple solution, but it simply delayed necessary increases to keep up with increasing costs,” Aviva said in its statement.
“Unfortunately, the cap was just a band-aid,” said Power.
Power said drivers worried about the rate increases should shop around.
“The shopping around method is the best message I can send,” she said. “Take the time to shop around. Each insurance company will look at your risk differently.”