EDMONTON — The Alberta government is promising changes to lower high auto insurance premiums, including an inflation-aligned cap for people with good driving records.
Finance Minister Nate Horner said that as of Jan. 1, drivers with good results cannot have their premiums increased by more than the September inflation rate.
The percentage was 3.7 percent.
The announcement comes as the state moves to lift its freeze on auto insurance premium increases at the end of the year.
The freeze was imposed in January to help Alberta drivers, who pay some of the highest insurance premiums in Canada.
The province also pledged to give the Alberta Motor Insurance Rates Board the power to offer ratepayers staggered payments on their bills and force insurers to refund a portion of their payments in high-profit years. ing.
“Achieving affordable motor insurance is an important commitment for the government and this is just the first step in delivering on that commitment,” Mr Horner said in a statement on Wednesday.
“We are committed to sustainability in the insurance industry and are asking for further cooperation from insurers as we continue our efforts to address these issues.”
The key change is tying rate hikes to inflation for better momentum.
A driver in good standing is defined as a driver who has not caused at least one at-fault accident in the past six years or been convicted of a criminal traffic offense in the past four years. He must also not have been convicted of a major traffic violation or one or more minor traffic violations in the past three years.
The province says a decline in driving during the COVID-19 pandemic has led to a surge in profits for insurance companies, exceeding standards set by Alberta’s insurance regulator, and rates. It is considering changes to give the commission the power to take action.
The state is proposing a recommendation that would give rate commissions the power to direct insurance companies to refund a portion of premiums to drivers during periods of high profits.
Rate committees may also be empowered to require insurance companies to declare rates and direct rate reductions.
The government has also promised to change regulations to allow drivers to pay their insurance premiums in installments rather than all at once.
Similarly, the state commissioned an independent report examining long-term reforms to the system.
A draft report is expected to be submitted by the end of the year, and a final report is expected to be submitted in the spring.
This report by The Canadian Press was first published Nov. 1, 2023.
Dean Bennett, Canadian Press