An uninsurable environment

Auto insurance settlements in Alberta have surged 116% over the past 10 years, according to GISA data. As a result, Albertans now pay over three times more in insurance premiums due to collision-related legal fees and litigation compared to drivers in other provinces.

Moreover, legal and other monetary pressures have surged well above the current provincial rate cap, creating an untenable situation in the marketplace. With the cost of delivering auto insurance now well in excess of the price that insurers are able to charge in premiums, several insurers have been forced to withdraw from the province, while others have restricted the coverages they sell.

"There is no longer any debate. The Alberta government must move urgently to eliminate the rate cap and introduce changes to improve affordability for drivers," Sutherland said.

"Only meaningful action to address the cost pressures in the system, including legal costs, can achieve this. Alberta's insurers are keen to work with the government to make meaningful action a reality."

Empower your investments with Qtrade

Discover Qtrade's award-winning platform and take control of your financial future. With user-friendly tools, expert insights, and low fees, investing has never been easier.

Start Trading Today

The MNP report

In conjunction with GISA's findings, a separate report by professional services firm, MNP, found that in Alberta between 2018 and 2022:

  • The frequency of lawsuits following a collision increased 48%
  • Over $1.2 billion was spent on costs associated with litigation following a collision
  • When a claim is litigated, legal costs now vastly exceed – and are more than double – the amount provided in a cash payment for pain and suffering to those injured in a collision

As a result, additional data from MNP projected that drivers' premiums are to increase by 87.6% over the next decade under the province's auto insurance rate cap if reforms are not introduced and current trends remain the same during this period.

Sponsored

Trade Smarter, Today

Build your own investment portfolio with the CIBC Investor's Edge online and mobile trading platform and enjoy low commissions. Get 100 free trades and $200 or more cash back until March 31, 2025.

Nicholas Sokic Contributor

Nicholas completed his master's in journalism and communications at Western University. Since then, he's worked as a reporter at the Financial Post, Healthing.ca, Sustainable Biz Canada and more. Aside from reporting, he also has experience in web production, social media management, photography and video production. His work can also be found in the Toronto Star, Yahoo Finance Canada, Electric Autonomy Canada and Exclaim among others.

Explore the latest articles

Trip cancellation insurance: Your coverage options

6 ways Canadian travellers can protect themselves from the unfortunate cost of flight delays, lost baggage and medical emergencies

Vawn Himmelsbach Freelance Contributor

Valuables that need more insurance
James Battiston

How to protect yourself from auto insurance fraud
David Saric

Closing costs to consider when buying a home
Barry Choi

Disclaimer

The content provided on Money.ca is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.