Every driver in Canada must have car insurance; it's required by law in each province.
Alberta has a private car insurance market, but its rates are regulated by the provincial government’s Grid rating program. This approach, which is unique in Canada, is designed to ensure that the minimum required coverage remains affordable.
The regulator, the Alberta Automobile Insurance Rate Board (AIRB), approves or denies rate increases requested by private insurance companies.
AIRB is also the group behind the Grid rating program. First introduced in 2004, the Grid dictates the maximum premium that insurers can charge for basic coverage (i.e. third-party liability, accident benefits and direct compensation property damage). For optional coverage beyond basic, insurance companies set their own rates without intervention from the regulatory board.
Where a driver lands on the Grid is determined by several factors including the number of years they’ve been licensed, any at-fault claims or speeding tickets on their record, and if they’ve completed an approved driver training program.
Drivers move up or down on the Grid as their driving record changes. The lower their 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 their insurance premium by hundreds to thousands of dollars.
If convicted or found at-fault for an accident, an Alberta might also be hit with surcharges on top of their 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.
An Alberta insurance provider determining a car insurance premium for a driver seeking basic coverage must offer a premium reflected on the grid if it’s cheaper than the premium they would have otherwise quoted.
|Insurance coverage||Mandatory or optional||Description|
|Accident benefits||Mandatory||Sometimes called no-fault benefits or Section B benefits, this covers costs associated with income replacement up to 80% of weekly earnings (max. $400 per week) for up to two years; medical treatment up to $50,000 per person per accident; funeral expenses 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.|
|Direct Compensation for Property Damage (DCPD)||This coverage, introduced in Alberta at the beginning of 2022, means that the driver’s own insurance company compensates the driver for damages following a collision for which the driver is not at fault. Alberta’s previous system, which was tort-based, required that drivers who were not at-fault to seek compensation from the other driver’s insurance company. This approach tends to be time-consuming and costly.|
|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. The mandatory minimum policy limit for PLPD 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.|
|Collision coverage||Optional||Covers car replacement or repair costs if your car is damaged in a collision and the policyholder is at fault.|
|Specified perils||Optional||Covers damage from perils specifically named in the Alberta auto insurance policy, such as attempted theft, damage in transport, earthquake, explosions, fire, lightning, riots or windstorm.|
|All-perils||Optional||Covers many perils, broadly, has similarities to collision and comprehensive coverage.|
|Accident Rating Waiver (SEF 39)||Optional||Prevents an Alberta car insurance premium from going up following a collision in which the policyholder is at fault.|
|Family Protection (SEF 44)||Optional||Protects drivers in a collision with an underinsured or uninsured driver. Will cover the difference if costs exceed the other driver’s insurance benefit.|
|Legal Liability for Damage to Non-Owned Automobiles (SEF 27)||Optional||Extends physical damage coverage to include rental cars. Drivers with this endorsement on their policies don’t need to purchase additional coverage when they rent a car.|
|Limited Glass (SEF 13D)||Optional||Reduces the amount of coverage for glass damage in exchange for a lower premium.|
|Limited Waiver of Depreciation (SEF 43R)||Optional||Waives depreciation on the repair or replacement of a new vehicle following damage from a covered peril. Is usually applicable to vehicles that are less than two years old.|
|Loss of Use (SEF 20)||Optional||Compensation for transportation costs up to a limit when a vehicle is damaged due to a covered peril.|
|Towing and Emergency Services (SEF 35)||Optional||Coverage for towing and other emergency service costs when a vehicle is disabled, and the driver doesn’t have roadside assistance.|
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|Savings: $2,969 (41%)|
|Savings: $460 (33%)|
According to theInsurance Bureau of Canada (IBC), Alberta drivers in 2020 paid an average of $1,514 per year.
Unfortunately for Albertans, their car insurance premiums are some of the most expensive in the country, falling just behind Ontario and British Columbia.
Alberta car insurance rates began increasing in 2012 when smartphones became widespread, and drivers started using them behind the wheel. Collisions resulting from this dangerous behaviour led to a surge in claims, causing premiums to rise. In years previous, rates had been declining, but insurers responded to this new threat by upping premiums.
While Alberta continued to see significant car insurance premium increases into 2020 (up 7.68% between 2019 and 2020), Ontario rate increases slowed considerably. Between 2019 and 2020, when the COVID-19 pandemic began, Ontarians paid only 1.35% more expensive premiums. Stabilizing premiums in Ontario were in part due to relief measures that many insurance providers introduced in response to fewer cars being on the road during successive lockdowns.
|Year||Alberta avg premium||Y-o-y change||Ontario avg premium||Y-o-y change|
Data available using the RATESDOTCA Auto Insuramap tool reflects that in 2021 a 35-year-old man driving a 2018 Honda Civic with a conviction and claims-free insurance record would have paid the most for coverage in Calgary and Edmonton.
On the other hand, the same driver based in Red Deer and Sylvan Lake would have the cheapest coverage.
While it’s difficult to pinpoint a specific factor that drives up premiums in any province, some of the most significant in Alberta have to do with the volume of auto theft in the province and the volume of collisions.
Below are the top five cities in Alberta with the highest insurance premiums:
|Alberta city||Average 2021 premium|
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Factors that influence your premium 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.
Insurance rates are going up in Alberta, but there’s a lot you can do to ensure that you’re getting the best price.
In Alberta, rate changes are regularly approved. 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 bundle your home and auto 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 group 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.
Driver: Female, 43
From: Calgary, Alberta
Driving: 2014 Ford Fusion
Driver: Male, 29
From: Edmonton, Alberta
Driving: 2017 Hyundai Tucson
Driver: Female, 55
From: Calgary, Alberta
Driving: 2013 Ford Escape
Driver: Male, 30
From: Lethbridge, Alberta
Driving: 2015 RAM 1500
Driver: Male, 28
From: Calgary, Alberta
Driving: 2008 Audi TT
Driver: Female, 31
From: Edmonton, Alberta
Driving: 2010 Honda Civic
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 the most recent study by the Government of Alberta, in 2018, 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.
In addition to any liability protection insurance providers must offer following a collision to cover medical expenses, they must also cover costs associated with repairing or replacing vehicles. This is especially expensive for newer cars which tend to have many electronic components and/or may be self-driving. Higher repair and replacement costs lead to more expensive premiums.
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.
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.
As of January 2022, Alberta put in place a Direct Compensation Property Damage (DCPD) system which means that following a collision each driver’s insurance provider pays out any compensation to their own client. The Insurance Bureau of Canada anticipated that for most Alberta drivers, DCPD would either reduce their premiums or they would see no change at all.
Car insurance rates are going up in Alberta, and if you renew your policy with the same provider you will almost certainly have to pay more than you did last year. The only way to buck this trend is to shop around for a better rate.
InsuranceHotline.com works with over 30 insurance providers. We aggregate their rates and give you multiple quotes side by side so you can choose the policy that’s best for you. If you like what you see, we’ll connect you to a licensed broker to secure the policy.
Last year, Alberta drivers who used InsuranceHotline.com saved an average of $410 on their car insurance. Find out how much you could save today.
*Shoppers in Alberta who obtained a quote on InsuranceHotline.com from January to December 2021 saved an average of $727 per year. The average savings represents the difference between the shoppers’ average lowest quoted premium and the average of all other quoted premiums generated by InsuranceHotline.com.