16 Alberta Car Insurance Companies Fined for Overcharging Drivers

More than $1.5 million in fines were levied against 16 car insurance companies in Alberta by that province’s superintendent of insurance recently for overcharging drivers on their policies.

The Alberta Superintendent of Insurance’s role is to protect consumers and enhance public confidence in insurance. It investigates and takes appropriate regulatory action when there is non-compliance with the provincial Insurance Act. Its office issued a total of 29 penalties for “charging private passenger automobile insurance premiums in excess of approved rates.”

It is unknown is how much or how many Alberta drivers were overcharged. The Insurance Bureau of Canada (IBC) and several of the penalized insurers say any drivers who were inappropriately charged have been refunded. The CBC first reported the news.

Alberta Auto Insurance Reform Review Continues

Meanwhile, the provincial government launched a review of auto insurance earlier this year to find ways to make insurance more affordable. That effort included appointing an advisory committee to study the issue. One option being weighed is the possibility of expanding the province’s no-fault insurance regimen.

The advisory committee’s review included surveying Albertans in February. It has since completed its work and submitted a report to Alberta’s President of Treasury Board and Minister of Finance, Travis Toews. Although the results of the committee’s work are to be made public, it is not known when the government will do so.

Also noteworthy, the provincial regulator – the Automobile Insurance Rate Board (AIRB) – published its annual survey, “Consumer Perspective on Automobile Insurance 2020” in June. It found only 23% of the survey’s respondents agree with the statement that ‘automobile insurance premiums are fair and reasonable’, which is a notable drop from the 60% of Alberta drivers who agreed with that statement in 2017.

A separate poll of Albertans’ views on car insurance costs in June by a provincial coalition called Fair Alberta Injury Regulations found Albertans are three times more likely to prefer an at-fault insurance system (61% support) versus a no-fault system (20% support).

IBC also tabled a proposal to the Alberta government earlier this year that states 93% of Albertans believe the car insurance system should be improved, and 92% of drivers want more options to help manage the price of their premiums.

Consumers in Alberta pay one of the highest average premium rates in Canada. Drivers in B.C. pay the most – an average of $1,832 – followed by Ontario at an average of $1,505. Alberta is third on the list with an average premium of $1,316.

What You Can Do to Lower Your Car Insurance Premium

While Alberta’s drivers await the outcome of the province’s insurance reform review, here are a few options which may help reduce your premium:

• Drive Defensively. Aim to make safe driving principles your goal every time you get behind the wheel. Maintain a clean driving record by refraining from speeding, driving aggressively or while impaired, and don’t fiddle with an electronic device while driving lest you be charged for distracted driving.
• Combine Your Policies. Suppose you have home insurance or condo insurance as well as an auto policy. In that case, many insurers will provide you with a small discount for “bundling” or combining your policies with the same insurer.
• Raise Your Deductibles. If you can afford to do so, consider raising the deductibles on your coverages. Generally, the higher the deductible, the lower the premium and vice-versa. Talk to your broker to determine if this makes financial sense for you.
• Enrol in a Usage-Based Insurance (UBI) Program. Some insurers offer a UBI program that monitors how you drive, how far and how often. If you consistently demonstrate safe-driving habits, you can earn a discount on your rate. Moreover, you can get a 5% to 10% discount for enrolling in a UBI program.
• Shop Your Rate. Whether your policy is up for renewal or not, explore your options finding adequate coverage that meets your budget by comparing policies and premiums for free from a broad range of insurers.