What You Need To Know
IBC is committed to working with consumers, the insurance industry and government to create an auto insurance market that stabilizes premiums and ensures consumers get the coverage and care they need.
This includes advocating for balanced changes to Alberta’s current auto insurance system that will make insurance more affordable while providing better care and more choice for drivers. IBC and its members are not advocating for a no-fault auto insurance system.
Get the facts about what is contributing to rising auto insurance rates, what the insurance industry has recommended to government and what you can do to help manage your premiums.
What Is The Main Cause Of The Rise In Auto Insurance Premiums?
There are many factors that have contributed to increases to auto insurance premiums for Alberta drivers – from more expensive repairs due to new technology in vehicles, to auto theft, to distracted driving.
Even with all these factors, the largest contributor to increased claims costs has been the cost to settle injury claims after a collision. This means there are more lawsuits that have settled for higher amounts.
*Sources: 2020 Oliver Wyman Annual Review Report (2015-2019 Data, page 16), 2019 Oliver Wyman Annual Review Report (2014 Data, page 14), 2018 Annual Review Report (2012-2013 Data, page 15), and 2017 Annual Review Report (2011 Data, page 24)
Regulation Changes and What They Mean For You
Increasing bodily injury claims have been largely driven by changes to how the Minor Injury Regulation (MIR) is interpreted.
The MIR was introduced by the Alberta government in 2004 to keep premiums stable for Alberta drivers as claims costs were increasing significantly. The MIR caps pain and suffering awards for collision victims who sustain minor injuries, such as sprains and strains, whiplash and soft tissue injuries. Injuries such as
broken bones and those that take much longer to heal are not considered minor. At the same time, the government introduced the Diagnostic and Treatment Protocols Regulation (DTPR) to provide collision victims who sustain minor injuries with pre-approved medical treatment through their auto insurance
medical coverage. This was designed to help collision victims recover as quickly as possible.
In 2012 and again in 2015, court decisions ruled that certain common less serious injuries were not subject to the cap. This resulted in many with minor injury claims receiving court awards in line with more serious injuries and allowed for a definition of minor injuries that went beyond the scope of what is considered minor in the prevailing medical literature and in other provinces. As a result, while the frequency of claims has remained stable, the cost of an average injury claim increased by 80.4% between 2011 and 2019 based on data from Oliver Wyman, the Alberta auto insurance regulator’s actuary. This is a cost which has ultimately been passed on to Alberta drivers.
The insurance industry believes that anyone with an injury should get the care they need. This care and treatment should be based on prevailing medical literature from doctors and experts, as it is the result of years of study and research. Insurers do not believe that the insurance industry or lawyers should determine what care is best; health professionals should.
Driving Change: Auto Insurance That Works
Learn more about what the insurance industry has recommended to the Government of Alberta to improve auto insurance for drivers across the province. Driving Change provides a blueprint to give drivers affordable, sustainable auto insurance that provides them with more choice and more care when they need it. This includes:
1) Giving Albertans access to more pre-approved medical care and greater choice in controlling their coverage and premiums through the More Care, Less Court product
2) Following best-in-class rules to increase competition and catch up with today’s digital age