Alberta’s vehicle insurance premiums among the highest in Canada: report

Click to play video: 'Alberta’s auto insurance premiums among the highest in Canada: report'
Alberta’s auto insurance premiums among the highest in Canada: report
WATCH ABOVE: A new report from Ernst & Young looks to compare the cost of private passenger vehicle insurance in different parts of Canada. As Eloise Therien explains, Alberta has some of the highest costs in the country. – Dec 12, 2022

A recent report by Ernst & Young (EY) has found Alberta has some of the highest auto insurance premiums in the country.

The review looked at 30 different driver profiles, including different cars to different ages and levels of driving experience, to compare what those drivers would pay in nine different provinces.

For example, the report found an 18-year-old driving a 2021 Honda Civic LX with a novice licence would pay $5,936 a year in Alberta, while only paying $1,129 in Saskatchewan.

EY used Calgary, Edmonton, Red Deer and Grande Prairie to represent Alberta in its report, which can be viewed here. 

“Albertans are getting gouged as they struggle to keep their car on the road and food on their table in the middle of an affordability crisis,” said Opposition finance critic Shannon Phillips. “They’re paying thousands of dollars more per year than other provinces for the same level of insurance.

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“This is highway robbery, but rather than addressing it, the UCP (government) is allowing big insurance companies to charge as much as they want.”

John Shmuel, managing editor at RATESDOTCA, said the NDP’s insurance cap was not all positive for insurers in Alberta’s private system, and he is not entirely surprised to see these numbers.

“Insurance companies have been talking about the fact that they’ve been losing money in Alberta,” he said.

“We actually saw insurance companies pull out of Alberta because they felt like they couldn’t price their insurance based on the amount that they were paying out in costs.”

Click to play video: 'Getting back in the driver’s seat when it comes to insurance rate hikes'
Getting back in the driver’s seat when it comes to insurance rate hikes

Shmuel said it is hard to say if the high prices are just companies “playing catch-up” after the cap was removed, but he pointed to several factors that hurt their ability to turn a profit, such as the high cost of legal and health fees.

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“Which in turn leads to increased costs for consumers,” he explained. “Can we cut out some middle people and more directly connect drivers with the services they need if they’re injured in an accident?

“I think no one’s happy to see high insurance prices for consumers, especially now with inflation.”

A statement from Finance Minister Travis Toews said he believes Albertans are getting better auto insurance coverage due to changes from the UCP government.

“As a result of our actions with Bill 41, Alberta drivers saw improvements such as stabilized rates, increased insurance options and flexibility. Albertans injured in traffic accidents can now access more health professionals, like dentists and psychologists, through their insurance claim,” his statement reads. “Amounts for grief counselling, income replacement and funeral benefits are now adjusted for inflation.

“As well, the 12-month change in insurance premiums as of the end of November this year is 2.4 per cent. This is less than half of what it would have been under the NDP rate cap.”

Regardless of where someone lives in Canada or what they drive, Shmuel said drivers can have some power in what they pay by shopping around upon renewal, looking into bundling options, and advising their insurance companies if the length of their commute changes.


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