This New Year’s will be a sombre one for many Albertans. Not only has the second wave of the pandemic meant that Albertans will be locked inside their homes unable to celebrate as usual with friends and family, but many have been hit hard but the economic effects of the pandemic losing jobs and income.
The only ones popping champagne and celebrating this year are insurance companies. Unlike other industries – airlines, restaurants, hotels, and hospitality – the insurance industry has profited off the pandemic. Big time.
Earlier this year, FAIR Alberta did an analysis that showed auto insurance companies were set to make windfall profits in the hundreds of millions of dollars as a result of the pandemic. These findings were corroborated by another study earlier this month that showed auto insurance companies saved as much as $745 million as a result of the pandemic.
On top of all these COVID related savings, auto insurers have hiked rates on Albertans at an average of 24% since 2019. Charging more in premiums and paying out less in claims means 2020 was a banner year for insurance companies.
Despite all these huge windfall profits, insurance companies are lobbying for more changes to Alberta’s insurance rules to eliminates the concept of an “at-fault” driver and the ability of Albertans to challenge insurers in court. This is the effect of the no-fault type insurance system insurance companies are proposing. It will save them even more money and hurt consumers even more.
In 2021, let’s hope the Alberta government stands up for consumers and puts the cork back in the insurance company champagne bottle.