Drivers in Alberta will see their insurance rates hold steady next year after the provincial government’s rate board decided to leave them unchanged.
The Alberta Insurance Rate Board left rates unchanged for the mandatory third-party liability all Albertans must carry in order to drive.
The board only has the power to regulate the portion all drivers must carry, which covers them for damage they might do to another person.
That basic coverage usually doesn’t take into account vandalism, theft or accidents where the driver is at fault.
The board held hearings in June looking for information on the new rates, which were open to the public.
Del Dyck, executive director of the board, said that, when setting rates, the board looks at the cost of third-party claims, including medical costs and repair bills.
“Depending on what is happening to those claim costs it will cause costs to either increase or decrease,” he said.
The government also looks at the administrative costs insurance companies are facing and sets aside a profit margin of roughly seven per cent.
Dyck said the decision to hold rates where they were came because of a worrying increase in the number of injury claims.
“Since about 2003, the frequency for bodily injury claims has been declining and since about 2009 it sort of flattened out, but in 2010, the year we have the most recent data, they actually started going up.”
Dyck said that, with about a five-per-cent increase in those bodily injury claims, the rate board felt a reduction in rates would not work this year.
Overall, since the government changed regulations, the board has lowered insurance rates by 23 per cent overall.
In both of the last two years, the board opted for five-per-cent reductions.
Dyck said because most people go beyond the mandatory coverage, customers could see an increase in their rates. He said there is a lot of competition in the Alberta market and people should look around.
“The board always encourages consumers to shop for their insurance. There are 74 companies in Alberta and there are programs online that you can access to get automatic quotes.”
Dyck said the board doesn’t encourage one insurer over any other and suggests only that Albertans look around.
The new rates will come into force in November.
