Some Alberta drivers are asking “why” after receiving their auto and home insurance renewals.
Calgarian Peter Rishaug is still reeling from the hike to his insurance premiums.
“I was shocked,” he told Global News.
“I had an increase of almost 18 per cent on my auto insurance. My house policy actually increased almost 30 per cent.”
Rishaug added that’s despite never having made a claim on either policy.
“It’s baffling how these increases are happening when people aren’t even making claims.”
The Insurance Bureau of Canada said some drivers are seeing hikes as a result of their driving history.
“The biggest impact on your insurance price is going to be your own driving record, your own claims record,” IBC’s Aaron Sutherland said.
However, he added one of the other big drivers of hikes was a previous five per cent rate cap put in by Alberta’s former NDP government and later removed by the current UCP government.
“Rate caps are really a short term solution with a long term cost,” Sutherland said.
“We’re dealing with a little bit of a hangover from that where rates had to correct.”
The UCP told Global News the correction hasn’t been that hefty.
Kassandra Kitz, senior press secretary for the Treasury Board & Finance ministry said in a statement: “We understand the Automobile Insurance Rate Board is not approving further rate increases, unless an application deems it absolutely necessary.”
“In fact, some auto insurers have applied to drop auto insurance rates in Alberta,” Kitz added.
The statistics on the Automobile Insurance Rate Board’s webpage point to a small increase. The numbers show the weighted average of approved rate changes was only three per cent for private commercial vehicles during the past year up to April 30, 2021. The rate change for commercial vehicles was just over eight per cent.
Kitz said the rate cap on auto insurance implemented by the previous NDP government did not work as intended. She said many drivers were negatively affected, and many insurers were asking clients to pay for the full year’s premium up-front, and some weren’t offering comprehensive coverage.
She added not only did Bill 41, the automobile insurance reform bill, take action to fix the system, it’s also expected to reduce auto insurance premiums.
However, both the province and the IBC agreed more work is still needed to stabilize premiums, especially when it comes to reining in costly injury claims and payouts.
Many Albertans have also seen home insurance rates rise. IBC told Global News people can blame Mother Nature for that — not insurers.
“Alberta is very much the disaster capital of Canada,” Sutherland pointed out.
“We’re seeing flood after flood, and then wildfires and then we had the biggest hailstorm we’d ever seen last year.”
How to save on insurance premiums
Sutherland said it is possible for people to save money on their premiums,
“There’s no better time than today to shop around,” he added. “It can end up saving you quite a bit of money.”
Other money saving tips posted on the Automobile Insurance Rate Board’s webpage include:
- Remove collision coverage on older vehicles. It may cost less to pay for your own repairs. Drivers will still be protected if they get into a collision. By law, insurance will cover the damages to the other driver’s vehicle
- Increase the deductible (the portion of the claim settlement you are responsible for) on your vehicle. When the deductible increases your premium decreases
- Consider bundling your vehicle insurance with your property insurance, many insurers offer multi-policy discounts
The Insurance Brokers Association of Alberta also suggested people look at the changes COVID-19 has brought into their lives.
“You’re driving a lot less so maybe you don’t need that same level of insurance that you had before,” CEO George Hodgson said.
“Maybe one of the family vehicles is actually parked because it’s just not needed, maybe you’ve sold off that boat or that ATV because you couldn’t afford to keep it or it no longer was your thing –, make sure to let your broker know.”
As for home insurance, the website ratehub.ca had some money-saving tips as well:
- Buy a newly built house or condo. Newer homes are less likely to have issues that will result in claims
- Have a properly-installed alarm system, sprinkler and other protection devices
- Don’t get coverage for things you don’t need
- Don’t file small claims
- Pick a lower-risk neighbourhood which will likely have lower rates of insurance
- Become mortgage-free
Again, it’s suggested shopping around, asking for discounts and when in doubt — talk to a broker.
“One of their strengths is they look out for the interests of the consumer first and foremost,” Hodgson said. “They don’t work for the (insurance) company.”
Rishaug has started to look at his options, but he said it shouldn’t have even come to this — not in the midst of a pandemic.
“We’ve been in this a year and a half — people are just starting to see the light at the end of the tunnel,” he added.
“To raise these rates at a time when people are most vulnerable, I find to be very, very misguided.”