Cheap Alberta Car Insurance Quotes

If you own a car or other vehicle, auto insurance is a legal requirement in Alberta. In Alberta, a standard car insurance policy has two compulsory components: third party liability and accident benefits.

In Canada, insurance follows the vehicle, so as long as you have a valid license, you are covered when someone lends you their insured car.

According to the Insurance Bureau of Canada (IBC), drivers in Alberta pay an average of $1,316 per year, approximately $110 per month. Unfortunately for Albertans, you pay some of the highest car insurance rates in the country, falling just behind Ontario and British Columbia.

Here are the average provincial annual premiums from highest to lowest, according to IBC:

British Columbia $1,832
Ontario $1,505
Alberta $1,316
Saskatchewan $1,235
Newfoundland and Labrador $1,168
Manitoba $1,080
Nova Scotia $891
New Brunswick $867
Prince Edward Island $816
Quebec $717

All large cities have high insurance rates, and Alberta is home to two of the largest cities in Canada. The high premiums faced by drivers in Calgary and Edmonton drive up the provincial average. Recent spikes in vehicle theft, collisions and distracted driving convictions have also led to an increase in rates province wide.

Serious collisions in Alberta

According to a recent study by the Government of Alberta, following too closely and running off the road are the most frequent driver actions that cause fatalities in the province. This tragically translates to fatal collisions in Alberta being significantly higher than the national average.

Canada fatalities per 100,000 population = 5.2
Alberta fatalities per 100,000 population = 6.8
Canada fatalities per 100,000 licensed drivers = 7.2
Alberta fatalities per 100,000 licensed drivers = 9.0

This explains part of the reason Alberta premiums are higher than other parts of Canada.

Data source: Government of Canada - Canadian Motor Vehicle Traffic Collision Statistics.

There is no one car insurance company that is the cheapest overall. Insurance companies assess drivers based on unique risk factors like your home address and personal claims history, which is why rates for the same coverage can vary substantially from one company to another. What is cheapest for you, might not be what’s cheapest for someone else.

To find the company that offers you the best rate and coverage, shop around and compare quotes. This savings technique is something that you should do annually whenever it's time to renew your policy.

Factors that influence your premium include:

• Where in Alberta you live
• The vehicle you drive
• How often you drive
• Your driving history
• Your insurance history
• The coverage options you choose to include

Premiums also depend on the insurer’s recent claims experience. If a specific insurance company has recently paid out for many collisions, we would expect their rates to increase to account for this elevated risk. Another company may have dealt with fewer recent claims, so they might offer lower premiums to find new customers.

In Alberta, auto insurance is regulated by the Alberta Automobile Insurance Rate Board (AIRB). They are responsible for approving or denying rate increases requested by the private insurance companies who operate within the province. AIRB are the group behind Alberta’s auto insurance Grid, which determines the maximum amount insurance companies can charge for basic coverage.

There are two mandatory coverages in Alberta. Every auto insurance policy must include:

• Personal liability and property coverage (PLPD) – Also known as third-party liability, this covers costs associated with lawsuits pertaining to injury, deaths, or damage to property of a third party in which you are responsible.
• Accident benefits – Sometimes called no-fault benefits or Section B benefits, this covers costs associated with income replacement, rehabilitation, medical treatment and funeral expenses, regardless of who was at fault for the accident.
  

Basic Alberta auto insurance

An insurance policy consisting of just PLPD and accident benefits is known as a basic policy. It meets the legal requirements, but does not extend financial protection to your actual car. This is why many Albertans opt for additional optional coverages.

There are many optional coverages available to drivers in Alberta. The two most popular are collision insurance and comprehensive insurance. Both of these optional coverages will cover damages to your vehicle, with collision focusing on damages caused by accidents, and comprehensive covering perils such as theft, hail and vandalism.

The mandatory minimum policy limit for PLPD (third party liability) is $200,000. According to AIRB, over 98% of Alberta’s drivers opt for additional liability coverage. The most common coverage limits are $500,000, $1 million and $2 million.

Accident benefits includes:

• Medical payments up to $50,000 per person per accident
• Disability income benefits of 80% of weekly earnings (max. $400 per week) for up to two years
• Funeral expense benefits of up to $5,000 per person
• Death benefits of $10,000 for head of household plus $2,000 to each dependent, $15,000 for first survivor and $4,000 for each additional survivor; $10,000 for the death of the spouse of the head of the household
  
  

First introduced by AIRB in 2004, the Auto Insurance Grid rating program dictates the maximum premium that insurers can charge for basic coverage (i.e. third-party liability and accident benefits). The Grid only applies to basic coverage; insurance companies set their own rates for optional coverages without intervention from the regulatory board.

Where you land on the Grid is determined by several factors including the number of years you’ve been licensed, any at-fault claims or speeding tickets on your record, and if you’ve completed an approved driver training program. Drivers move up or down on the Grid as their driving record changes. The lower your Grid Level, the cheaper your insurance rate.

Less experienced drivers generally face the highest premiums, but their basic rates are often capped by Grid. Each at-fault claim moves the driver five steps up the Grid, and this can increase your insurance premium by hundreds to thousands of dollars. If convicted or found at-fault for an accident, you might also be hit with surcharges on top of your premium.

A safe and experienced driver can expect to pay less than Grid rates. According to the AIRB, about 94.5% of Alberta drivers pay less than the maximum set out by the Grid program.

Some provinces have a government-owned public auto insurance system. Alberta on the other hand, has a private auto insurance system. Proponents claim that this benefits drivers because market competition forces providers to compete on price, ultimately lowering premiums. In support of this argument, Alberta’s competitive auto industry has consistently been able to offer cheaper rates than publicly operated B.C.

However, things could soon change. Alberta’s previous government imposed a cap which limited auto insurance rate increases to a maximum of 5%. In 2019, the new Conservative provincial government decided not to renew this cap, meaning we can expect large rate increases in Alberta in 2020.

In Alberta, rate changes are approved every three months. Compare quotes before renewing your policy to find the cheapest option.

Save in the neighbourhood of 5 to 10% by increasing your deductible from $500 to $1,000.

Pay your premiums annually, in one lump sum, to avoid administrative fees that sometimes accompany monthly payments.

Save 5 to 15% when you buy your home insurance from the same company that covers your car.

If you have more than one vehicle, save 10 to 20% by insuring them on the same policy.

Each year, review your optional coverages to ensure they are still necessary. If not, getting rid of these excess coverages will lower your premiums.

Some insurers offer discounts to members of local organisations like the Alberta Motor Association, AUPE members, or university alumni. Ask your provider about the member discounts they offer and see if you qualify.

Let your insurer know if you have winter tires, as some providers offer a winter tire discount of about 5%.

Encourage young drivers to take driver’s training. Once the course is completed, the insurance savings will offset the initial cost.

Where you live and what you drive are two important factors in what you pay for coverage. If you move or buy a new vehicle, don’t assume your current provider will continue to offer you the best price. Shop around to be sure.