Alberta’s auto insurance reform plan will soon be released. Will consumer protections be gutted?

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Last December in the wake of skyrocketing insurance rates, the Alberta government said it was going to review the province’s auto insurance system to help find savings for consumers and stabilize rates.

A lot has happened since then – pandemic, lock-downs, oil crash, economic hardship. It’s been a tough year on everyone but particularly Albertans. Insurance companies haven’t helped one bit.

Let’s review the how the insurance industry has treated Alberta consumers the past year:

Sky-high profits, sky-high premiums: Through 2019 and 2020, insurance premiums have shot up 24% for the average Albertan. Over this same period, auto insurers are making hundreds of millions on pre-tax profit in the Alberta market. Given how much insurers are raking in, it’s unclear (to put it politely) why rates are skyrocketing.

No pandemic support for you: COVID-19 dramatically reduced the amount of driving by auto insurance policyholders. Fewer kilometres driven meant less time on the road and fewer driver errors. Equally important, fewer vehicles on the road reduced the risk that driver error would lead to collisions, vehicular damage, and bodily injury. Many U.S. auto insurance companies reacted to these facts by providing direct rebates to consumers on their premiums. In Alberta? Nothing. Sure, Alberta’s auto insurance companies said you could change your policy and drop your coverage to save money during COVID-19 but you could also do that at anytime – pandemic or not – it wasn’t true support. Insurers left Albertans in the lurch and pocketed huge windfalls through reduced claims costs instead.

Slow response to process claims for record hailstorm: Four months after a record $1.5 billion dollar hailstorm hit northeast Calgary, tens of thousands of families still wait for insurance companies to come through on their policies and help repair windows, doors, and roofs. The slow response to process claims and help has given tens of thousands of Calgarians increased anxiety as winter approaches and repairs remain outstanding.   

Millions in fines for overcharging Albertans on auto premiums: Last month the Alberta government released information that showed auto insurance companies have been levied more than $1.7 million in fines for overcharging premiums on drivers. Insurance companies said these incidents were clerical errors except companies had been fined 29 separate times since 2016 for the behaviour.

Despite all the skyrocketing premiums, sky-high profits, no pandemic support, slow response to process claims, and fines for breaking the law – Alberta’s insurance companies are still looking for more from the Alberta consumer.

What insurance companies want

It’s a bit audacious given the year they’ve had but insurance companies want less accountability and more power over consumers and the auto insurance system in Alberta. Insurance industry lobbyists are pushing for a no-fault type of insurance system that would eliminate consumer rights to have insurance company decisions challenged in court. No accountability through the courts means insurers are free to shortchange Albertans without any checks on their power. This is the type of high-premium, low-coverage auto insurance system that exists in Ontario. It’s a mess.

How you can help

Write or call your MLA today – tell them not to give handouts to profitable insurance companies. Tell them to put consumers first and create the fair system that Alberta drivers deserve.

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