Auto insurance

NDP calls for a one-year freeze on auto insurance rates in Alberta

However, the Alberta Auto Insurance Rates Board says rates have not only plateaued recently, but are trending lower.

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Alberta NDP Leader Rachel Notley is calling for a year-long freeze on auto insurance premiums, citing massive corporate profits as inflation hits 30-year highs.

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Speaking at a news conference on Friday, the Leader of the Opposition pointed to the Superintendent of Insurance’s 2020 annual report, which showed the auto insurance industry was charging Alberta drivers $385 million more. in premiums in 2020 than in 2019, extrapolating the total to $1.3 billion over the past three years. The Superintendent of Insurance has not released a report for 2021 and will not for 2022.

“We estimate that this freeze we are proposing will save motorists $360 million,” Notley said. “It doesn’t offset all of the costs of capping rising inflation, but I would say it’s a good start and gives some predictability to Albertans who desperately need it.”

Premiums soared in 2020 after the province let the NDP’s 5% cap on base premiums expire in 2019.

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However, the Alberta Auto Insurance Rates Board — a nonpartisan review board that reviews requests for rate increases — said the increase was temporary and not as high as the 10 to 30 percent Notley claims. Moreover, rates have not only plateaued recently, but are also trending lower.

Laurie Balfour, executive director of the AIRB, told Postmedia on Friday that rates jumped an average of 7.6% in 2020. However, she said, despite the cap in place, rates jumped by 6.9% in 2019 and insurance was less accessible for additional coverage. such as a collision based on driving records and locations. Following this peak in 2020, rates fell. In December 2021, the three-month moving average was down 3.2%, Balfour said, and rates are down 0.83% over the past 12 months.

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“The Alberta Tariff Board has been very aware of the impact on consumers, we are certainly concerned about affordability as well as the availability of insurance,” she said. “It really is a balancing act.”

This does not mean that no Albertan will see an increase in their rates, as many factors are taken into consideration.

Decisions on rate claims are vetted and go through actuaries and processes to ensure companies are factual in their claims.

Furthermore, she said that the profitability of insurance companies has been overestimated because the figures do not take into account many other tax factors such as the increase in the prices of general costs, financing, salaries, brokerage costs and supply chain factors as they relate to the automotive industry. insurance companies need to consider.

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“What we saw as actual data reported by the General Insurance Statistics Agency last year was a very different picture than what we saw reported by the NPD in terms of profitability figures,” a- she declared.

In total, the entire auto insurance industry in Alberta in 2020 made an after-tax profit of $167 million, including $32.4 million from passenger vehicles. She said there was an underwriting loss, but they made their money on investment income.

She said additional pricing varies from company to company and recommends consumers seek the best deal or even go directly to the companies and use a broker if necessary. Balfour said most companies are taking a wait-and-see approach this summer to what’s happening with the pandemic and other global pressures.

Overall, based on 2020 data, Balfour said Alberta has the third-highest insurance rate in the country, behind only Ontario and British Columbia, but in terms of income level and age. accessibility, Alberta drivers were in the middle of the pack.

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Twitter: @JoshAldrich03

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