Fact Check

Been In an Auto Collision? Here Is What You Need to Do.

If you’ve ever been involved in an auto collision you know how stressful the situation can be, especially if you don’t know what to do. You can minimize the stress if you stay calm and follow some simple rules.

First and foremost, if anyone is injured or you think the other driver may be guilty of a Criminal Code offence, such as drunk driving, call 911. Once you’ve assessed that everyone’s safety is secure, follow these steps:

  1. Do not leave the scene of the collision. It may be a criminal offence to do so.
  2. If there are injuries or if the damage is greater than $2,000, you have a legal obligation to report the collision to the police. You can do so my calling the police to report the collision; depending on the situation, they may instruct you to visit the nearest police station to report the collision.
  3. If it’s safe, move the vehicles to the side of the road. If the vehicles aren’t drivable, turn on the hazard lights or surround the vehicles with cones or warning triangles if available.
  4. Regardless of the circumstances, never admit fault for the collision, never sign any documents regarding fault and never promise to pay for the damages.
  5. Record all collision details. Use IBC’s Collision Report Form.
  6. Record what happened and how, and when, where and why it happened, as well as weather and road conditions. If possible, take cellphone photos of the vehicle damage.
  7. Collect names, addresses, licence plate numbers, insurance details and contact information for all drivers, passengers and witnesses.
  8. Call a tow truck if your vehicle is not safe to drive.
  9. Report the collision to your insurer as soon as possible. If you are injured in the collision, you may be eligible for benefits. Submit claims forms as instructed by your insurance company.

Bottom line, it’s best to be prepared in order to manage an auto collision with peace of mind. Print a copy of the IBC’s Collision Report Form and keep it in your glovebox so that you can ensure you capture all the necessary details at the time of the collision accident.

Updated August 31, 2021

How are auto insurance rates approved in Alberta?

Alberta has a competitive and highly-regulated auto insurance market, which serves to strike the right balance in ensuring fairness and affordability for drivers. While insurers must earn your business by offering competitive rates and innovative products, the Alberta Auto Insurance Rate Board (AIRB) has the final word on any rate changes submitted by insurers.

If you’ve ever wondered how auto insurance rates are approved, we’ve put together a brief outline of the process below.

Setting rates.

  1. Rating criteria: Any data that is factored into calculating insurance rates – from where a driver lives to years of driving experience – must first be approved for use by the Alberta Superintendent of Insurance. Insurers are not allowed to include a factor without permission from the Superintendent.
  1. Approving the rate change: Insurers must submit proposed rate changes (both increases or decreases) to the AIRB. The Rate board reviews auto insurers’ proposed rate changes and evaluates each request. The AIRB then makes a decision based on actuarial assumptions, which includes projected claims cost increases, operating expenses and maximum permitted profit margins.

Data used by the AIRB comes from insurers and the General Insurance Statistical Agency (GISA), which is made up of provincial insurance regulators from across Canada.

You can learn more about AIRB’s filing guidelines here.

How often do rate filings happen? How long does it take for rates to get approved?

Insurers submit filings to the AIRB regularly. Requests could be requests for:

  • a rate increase
  • a rate decrease or
  • to change how an insurer calculates their rates.

The AIRB recently launched a new web page to report on approved filing decisions as they are implemented, replacing the quarterly filing decisions publications.

This enhancement will enable policyholders to see their insurer’s rate changes over the previous three years. Data will be updated daily, as insurers implement changes to their rating programs.

The whole process takes at least 90 days from the time an insurer submits a rate filing to when the consumer sees the rate change.

Drivers will receive a renewal notice at least a month before any new rates are proposed to come into effect.

Do you have more questions about auto insurance? Visit our FAQ page here.

Updated August 9, 2021

Top 10 Tips to Drive Down Your Auto Insurance Rates

Auto insurance rates are determined by a number of factors, such as your driving record, where you live, and the type of car you drive. However, there are things you can do to manage your premiums and even lower them by making informed decisions and exploring options available to them.

Check out our Top 10 list of ways you can take control of your auto insurance premiums. Don’t hesitate to call the IBC Insurance Helpline at 1-844-2ask-IBC (1-844-227-5422) if you have any questions.

Updated July 13, 2021

Alberta Drivers Offered More Choice with Usage-Based Insurance

Usage-based insurance (UBI) is becoming more common in Canada, and recent changes by the Alberta government are making it easier for insurers to offer this product to Albertans, giving more choice and flexibility to our drivers.

Traditionally, premiums have been based on variables such as where you live and your driving experience, gender and age. UBI allows drivers to have their insurance premiums based on their driving record and habits.

Check out the frequently asked questions and video below to learn more about UBI and the benefits it can provide.

Frequently Asked Questions

How does UBI work?

UBI leverages technology to customize a driver’s insurance premium by monitoring real-time driving behaviours. By simply installing a small wireless device in your vehicle or using an app on your mobile device, you can record your individual driving habits, such as:

  • The distance you drive
  • The time of day you drive
  • When and how you brake and accelerate
  • Your speed compared to the posted speed limit
  • Whether you use your phone while driving (you can indicate if you are riding as a passenger).

The recorded information provides insurers with the data they need to offer insurance at premiums based on the driver’s unique driving behaviours and vehicle use.

How much could I realistically save with UBI?

UBI tracks how much you drive, as well as key risk factors that could increase your chance of being in a collision. If you have good driving habits or drive less often, you could see a discount on your insurance premium.

Each UBI program is different. Some offer discounts simply for enrolling in UBI programs with the potential for larger discounts depending on your driving habits. Many insurers also have online dashboards that allow drivers to track their driving habits and potential savings in real time.

Could my insurance costs go up from UBI?

The goal of UBI programs is to put drivers in a position to control their own premiums by encouraging safer driving behaviours and rewarding good drivers with savings.

Currently, most UBI programs offered in Alberta have been designed to offer savings to drivers with safe driving habits. But recent changes to regulations will allow insurers to fairly charge drivers who consistently exhibit risky driving behaviours. In short, some drivers may see an increase in their premiums, but this will depend on their driving habits.

How is my data used?

Any data collected is subject to strict privacy policies. Insurers will analyze your driving data solely to determine if you qualify for savings on your insurance premium.

How many insurers offer UBI in Alberta today?

As of May 2021, only a handful of insurance companies in Alberta offer drivers the choice of UBI, but this is expected to increase.

Contact your insurance representative to find out if UBI is available to you.

Updated May 6, 2021

Putting the Brakes on Auto Theft

We don’t often think of auto theft as big business, but for the criminals who participate in this activity, it is. Auto theft is a major problem across Canada and, unfortunately, Alberta has had the highest rate of vehicle thefts in Canada for several years.

Here are some numbers to illustrate how big this problem is nationwide: a vehicle is stolen every six minutes in Canada; an experienced thief can steal your car without a key in just 30 seconds; and auto theft costs Canadians almost $1 billion every year.

The likelihood of your car being stolen, either because you live in an area with a high rate of thefts or because your vehicle is a popular target for thieves, ultimately impacts the cost of your insurance premiums. And auto theft isn’t just an insurance problem – it is a public safety issue that ties up resources like our police services, court system, and even health care.

Helping combat auto theft starts by knowing the risks. To better understand which vehicles are being targeted and to identify the most common trends, every year, Insurance Bureau of Canada (IBC) releases a list of the most stolen vehicles in Canada, including in Alberta.

What topped the list in 2020?

In Alberta, Ford F-Series and Dodge Ram trucks were the most frequently stolen vehicles. Oil and gas companies have used them almost exclusively, which has brought a disproportionately high number of them to the province. These trucks are attractive to thieves and the 2007 and earlier models were easier to steal because many did not have theft-deterrent devices.

On a national level, the theft of vehicles equipped with technology like keyless entry fobs, and high-end SUVs is on the rise. These vehicles are particularly attractive to organized criminals for export overseas. Also, since the start of the pandemic, street racing and stunt driving have increased and this has created a growing market for small and speedy stolen vehicles.

Reducing your risk

Every Albertan can take some easy steps to help minimize their risk. Check out the infographic and video below to learn more about what you can do to protect your vehicle, and talk to your insurance representative about the best coverage for your vehicle.

Updated April 8, 2021

Vigilance is key to fighting insurance fraud

As Albertans continue to cope with the COVID-19 pandemic and the issues it’s causing in all areas of society, take a moment to recognize that criminals are taking advantage of these difficult times. Studies show that the incidence of fraud has risen throughout the pandemic as criminals use it to make ill-gotten profits.

Auto insurance is one area in which criminals have increased their attempts to swindle Canadians. They’ve set up schemes involving staged collisions, and are working scams with disreputable body shops and tow truck operators.

Staged collisions

These planned auto accidents risk the safety of innocent people. The criminals also make false insurance claims by involving their unsuspecting victims. Fraudsters can profit from these false claims, and the collisions needlessly tie up our already overburdened law enforcement, court and health care resources.

The pandemic makes Canadians more susceptible to these scams. Fears of contracting the virus have made people less likely to remain at the scene of an accident and engage with the other people involved in the crash. The pandemic has also made collision victims reluctant to go to the hospital and promptly report an accident. These conditions create situations in which criminals can add the names of people not even involved in the collision to a claim.

Insurance fraud costs Canadians well over $1 billion a year in added insurance premiums.

Watch the video Staged Collisions: What You Need to Know to learn how staged collisions work, what to look out for and what to do if you think you’ve been a victim.

Body shop and towing scams

In these scams, fraudsters prey on the consumer’s fear of contracting COVID-19 by charging exorbitant fees to clean vehicles involved in a collision, and they may store the vehicles longer than needed before commencing repairs. The vehicle owners need to ensure that the auto shop is properly doing the agreed-on repairs. Unregulated and dishonest practices in the towing and storage industry drive up the cost of the auto insurance premiums that consumers pay.

Drivers should know their rights when their vehicle is towed, and should understand where their vehicle is being taken when it’s towed from a collision scene.

Stopping insurance fraud requires law enforcement, the insurance industry and citizens to all do their part. If you’re aware of an incidence of insurance fraud or suspect that you may have been a victim of a staged collision or other insurance crime, it’s easy to report it. Contact your insurer, law enforcement or call IBC’s anonymous toll-free TIPS Line at 1-877-IBC-TIPS (1-877-422-8477) or submit a tip online at ibc.ca.

Updated March 16, 2021

How auto insurance premiums are calculated

The Alberta government has taken steps to improve our auto insurance system by increasing benefits for those injured in a collision, changing the Minor Injury Regulation and eliminating plenty of the system’s red tape, but there’s still work to be done. While our industry and other stakeholders work with government to continue improving the auto insurance system, there are actions Albertans can take right now to potentially reduce the amount they pay for insurance.

The first step is understanding the many factors that are used to determine auto insurance premiums. Knowing how the insurance industry calculates this figure can help you take more control over your insurance costs.

What Factors Contribute To Auto Insurance Premiums? 

Insurers can only use government approved factors to determine your premium. These include your driving history, your age, where you live, how often you drive and what kind of car you drive. Insurance companies do not use race, income, occupation or employment history. It is not only against the law but more importantly, it’s not how we do business.

Let’s look more closely at some of the key factors used to determine insurance premiums:

The make and model of the car you drive is very important in setting your premiums. Buying or leasing a car with a lower-cost insurance rating can help to manage costs. You can also look at a vehicle’s safety rating by the Insurance Institute for Highway Safety as another way to potentially reduce your costs. Insurers also use a system called the Canadian Loss Experience Automobile Rating (CLEAR) to determine how likely it is that your vehicle will be involved in a claim and what that will cost. If you choose a car with a lower claims risk and CLEAR number, you can expect a lower premium.

Where you live is another factor in determining premiums. Why? Because the number of accidents that happen in congested, high population density neighbourhoods in cities like Calgary or Edmonton is higher than in sparsely populated, rural areas.

Your driving record is another key factor in how insurance companies calculate premiums. Licence suspensions, impaired driving and other convictions for driving offenses all add up to higher insurance premiums. The best way to keep costs down? Be a safe driver. By building a consistent, accident- and conviction-free driving record you can help reduce your costs.

The insurance industry is also advocating for increased use of telematics in Alberta. Telematics, or usage-based insurance (UBI), uses a smartphone app to record your driving activity. Insurers use this information to personalize your insurance premium. In other words, good drivers are rewarded.

We’ve put together a video that talks more about how premiums are calculated. You can also learn more about how to manage your premiums here and here.

Updated February 16, 2021

Auto insurance changes that benefit all Alberta drivers

Auto insurance in Alberta needs to work for everyone, no matter where they live, and this means that any changes to our insurance system should benefit both urban and rural drivers.  Alberta’s insurance industry is advocating for balanced changes to Alberta’s current auto insurance system. We’re working with the government and other stakeholders to make auto insurance more affordable while providing better care and more options for drivers.

FAIR Alberta, which is funded by a group of personal injury lawyers, has incorrectly suggested that IBC’s proposed recommendations for change to our insurance system will not benefit Albertans living outside urban areas.  This is simply untrue.

Here are the facts:

  • IBC and the insurance industry are focused on making auto insurance more affordable for all Albertans. We want everyone to have access to efficient service and medical care if they’re injured in an accident.
  • Those who have been injured a collision will be able to access medical care at the location that works best for them. Their doctor or health provider – not personal injury lawyers or insurance companies – will make the decisions on what kinds of treatment they need and where they can go to get that type of treatment. It’s in everyone`s interest that consumers get the care they need to recover as close to home as possible.
  • Our recommended changes to the auto insurance system will make it easier for you to access the care you need (regardless of where you live) while also cutting costs from the system. The end result is a system that provides the care you need at a lower cost.

The changes our industry supports are designed to cut costs from the system so that it can become more stable and ultimately help make auto insurance affordable for Albertans, whether they live in Calgary or Camrose.  It’s that simple.

Updated October 29, 2020

Let’s make auto insurance in Alberta affordable

Everyone wants an auto insurance system that works well for Alberta’s 3 million drivers. Unfortunately, the system is marred by high costs for both consumers and insurers. The reason for these sky-high costs can be traced back to one issue – inflated claims costs draining resources from the auto insurance system.

There was a time when Alberta’s auto insurance system worked well. In 2004, Ralph Klein introduced auto insurance reforms through two key regulations – the Minor Injury Regulation (MIR), and the Diagnostic Treatment Protocols Regulation (DTPR). Together, these regulations were designed to keep claims costs and premiums stable, while ensuring that injured claimants had access to more pre-approved medical care following an accident.

The MIR is essentially a cap that limits pain and suffering awards to $4,000, for claimants having minor injuries. (With inflation, this number now stands at $5,296.)  While people claiming pain and suffering damages for minor injuries have their awards for these capped, there are no caps for people who sustain non-minor injuries. Furthermore, there are no restrictions on suing for lost wages and medical expenses. The DTPR also allowed accident victims to access treatment and care right away, no questions asked.

The result was a system that focused on people recovering from their injuries and not on winning awards in court for sprains and strains.

Then in 2012 and 2015, two court cases held that based on how the MIR was written, certain injuries that are considered minor/common in other jurisdictions are not to be considered minor under the current MIR. These decisions were made even though, according to the medical literature, these types of injuries generally heal in weeks or months and are often considered minor elsewhere in Canada. As a result, claimants having these injuries were not bound by the pain and suffering damages cap and claimants began to sue for amounts far greater than the cap amount.

The numbers from the government’s actuary, Oliver Wyman, show very clearly the consequences for this vulnerability in the MIR. Claims costs have soared, and bodily injury claims now account for more than half of the increase in total claims costs. Three other independent actuaries have come to similar conclusions – so we know the data is concrete.

In fact, since 2011 average claims costs associated with bodily injury (driven by court costs and the administrative fees associated with these claims) increased by about 8% per year: from $41,887 in 2011 to $74,946 in 2019. Today, because of these changes, insurers pay out an average of $1.09 for every $1 they earn, and – most importantly – Alberta drivers have the second highest premiums in Canada among provinces that provide private auto insurance.

Who wins in this scenario? It’s not Alberta’s drivers, who pay high premiums thanks to out-of-control claims costs, and it’s not the insurance industry, which doesn’t want to charge their consumers more nor continue to lose money under the status quo.  The current situation – the status quo – does not work for most people and if special interest groups put their own profits aside they too would focus on cost cutting reforms.

It’s time to fix the system. Changes to the auto insurance system mean more money for other things for Alberta drivers. It’s that simple.

Updated October 5, 2020

The facts about auto insurance reform

Our current auto insurance system isn’t working for Alberta’s 3 million drivers. Premiums have continued to rise and consumers who want to keep their insurance affordable don’t have many options. This is why the insurance industry is working with the government of Alberta to fix the system. The insurance industry wants to see much-needed reforms that will keep premiums affordable for drivers, while offering more choices in coverage and better care after a collision.

A lot of information about what the insurance industry is advocating for is being shared, and not all of it is accurate. With so much noise online and in the media, it can be hard to separate fact from fiction. To help Albertans figure out which is which, this FAQ provides the facts about some of the most talked about auto insurance reform topics.

Is the insurance industry advocating for a change to a no-fault system?

No. Insurance Bureau of Canada and the insurance industry have never advocated for a no-fault system in Alberta. The industry is advocating for balanced changes to the current auto insurance system that will stabilize premiums and keep them affordable, while increasing choice for consumers and providing better care for those who need it.

Why do costs need to be removed from the system?  

Removing costs from the system lessens the financial burden on drivers. This means taking a hard look at what’s contributing to rising claims costs, and what claims costs are not benefiting consumers. Bodily injury (BI) claims – which have increased by a staggering 80% since 2011 – are the primary cause of premium increases.1  Lawyer fees and other costs when a claim goes through the court system are a big driver of BI costs and are ultimately passed on to all Alberta drivers. Reducing these costs will benefit consumers.

Are insurers trying to take away a driver’s right to sue after an accident?

No. All consumers would still have the right to sue for damages such as lost income and future medical care, especially in the event of severe or catastrophic injuries.

The suggested insurance product will focus on providing Albertans injured in collisions with the best care available so they can get the treatment they need to recover from their injuries.

As a way to better manage costs, the insurance industry is advocating for a made-in-Alberta solution that allows consumers to tailor their insurance premiums to suit their needs. One change gives consumers the option to pay a lower premium if they forego the right to sue for pain and suffering associated with minor injuries. Consumers who want the ability to sue for pain and suffering in cases where minor injuries are involved have the ability to purchase that option. Either way, all consumers can still sue for items like lost income and/or future medical care needs.

What does focusing on care really mean for drivers injured in a collision?

The auto insurance system in Alberta currently focuses on providing cash settlements rather than giving collision victims prompt access to the care they need to recover from their injuries. If Alberta’s insurance system sticks with the status quo, nothing will change – premiums will continue to rise as BI claims costs increase, and collision victims will continue to suffer because they won’t have access to much of the care they need while they wait on lengthy court proceedings. The insurance industry’s proposed reforms will give Albertans access to more timely, pre-approved medical care for minor injuries to help them recover more quickly. Most importantly, treatment options would be based on prevailing medical literature from doctors and experts, not decided by the insurance industry.

Under these reforms, who will determine what care collision victims receive?

The insurance industry believes anyone with an injury should get the care they need, when they need it. We also believe treatment should be based on prevailing medical literature by doctors and health care experts, and not decided by insurers or lawyers. The insurance industry’s proposed changes will give all consumers across the province greater control over their premiums and gives accident victims access to more timely, pre-approved treatment to return to their lives instead of waiting for a claim to work its way through the court system.

Why is the insurance industry advocating for changes to the definition of a minor injury?

In 2004, the Alberta government capped pain and suffering awards for minor injuries to help control rising BI claims costs and stabilize premiums. The system then enjoyed nearly a decade of stability. But legal challenges in 2012 and 2015 resulted in certain common, minor injuries no longer being subject to the cap. Many minor injury claims received court awards in line with more serious injuries, significantly increasing the costs of claims and premiums for Alberta drivers.

Today, the definition of a minor injury in Alberta goes well beyond the scope of what is considered minor in other provinces and doesn’t align with prevailing medical literature. That is why the insurance industry is asking regulators and the government to update the definition of a minor injury. For collision victims, this would mean re-establishing that minor injuries would be those that health care experts deem common and that are expected to heal in weeks or months, such as sprains, strains and whiplash. More severe injuries that typically take much longer to heal, such as broken bones, would not be considered minor.

Want to know more? Read about the changes the insurance industry is advocating for at Driving Change: Auto Insurance That Works.

1Sources: 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). Oliver Wyman is the Alberta Automobile Insurance Rate Board’s consulting actuary.

Updated August 25, 2020

Alberta’s insurance industry is local and an essential part of the communities we serve.

Today, 45 private passenger auto insurers operate across the province employing thousands of people who live and work in the same communities as their clients. Although some detractors want Albertans to think of insurance professionals as outsiders, nothing could be further from the truth. We are members of your community, and we are on the ground every day and ready to support our fellow Albertans when they need it most.

We are also some of the more than 3 million drivers across the province who know the current auto insurance system isn’t working. That’s why Insurance Bureau of Canada (IBC) and the insurance industry continue to advocate for balanced changes that will keep auto insurance affordable and increase choice and care for those who need it.

Being a part of the community and understanding the issues that drivers face in Alberta is important to IBC. It has a team in Edmonton that works with the Government of Alberta and the Auto Insurance Advisory Committee to improve auto insurance for drivers across the province. It also has a local consumer information centre where trained industry personnel answer thousands of inquiries each year from consumers just like you.

Check out how Alberta’s insurance industry supports the local economy:

  • In 2018, 10,842 people worked in Alberta’s property and casualty (P&C) insurance industry
  • For every 100 jobs created in Alberta’s P&C insurance industry, 42 jobs are created in other areas of the province’s economy
  • The total economic footprint associated with the P&C insurance network supports about 1 in every 150 jobs in Alberta (“footprint” refers to the sum of the industry’s direct, indirect and induced economic impacts)
  • The P&C insurance industry contributes significantly to Alberta’s economy, paying approximately $375 million in premium taxes and $155 million in health care levies in 2017 and directly contributing about $1.2 billion to Alberta’s GDP in 2018.

Video: Alberta’s Insurance Industry is Local & Essential

Source: Conference Board of Canada Report – Alberta’s Insureconomy: The economic contribution of the property and casualty insurance industry – commissioned by IBC (July 2019).

Updated August 7, 2020

Insurers are advocating for balanced changes, not no-fault insurance.

While FAIR Alberta, a group funded by personal injury lawyers, continues to claim that Alberta’s auto insurers and IBC are pushing for no-fault auto insurance, their claims aren’t supported by the facts.

IBC and its members are advocating for balanced changes that will keep auto insurance affordable while providing the choice and care Alberta drivers deserve. The insurance industry’s recommendations to the Government of Alberta and the Auto Insurance Advisory Committee are publicly available and can be found here.

Alberta drivers can learn more about how IBC and the Insurance Brokers Association of Alberta are contesting FAIR Alberta’s claims in a July 7 article on Canadian Underwriter.

Updated August 7, 2020

Response to FAIR post: “Insurance companies in Alberta set to rake in almost $1 billion in pre-tax profit over 2019 and 2020”

In a June 17 post to their website, FAIR, a group funded by personal injury lawyers, must have used a crystal ball to claim that insurers will make $1 billion in pre-tax profits in 2019 and 2020. But as in the majority of FAIR’s reports, the data is wrong.

The General Insurance Statistical Agency, whose data FAIR insists it uses, has not reported on claims costs for 2020 – since the year has not ended – and it does not predict claims costs. It collects data on what has already happened. The assertion that the industry will make a $1 billion profit is based on FAIR guessing what claims costs will be in response to the COVID-19 pandemic. This is like guessing how many jelly beans are in the jar – it’s far from accurate. Further, it does not take into account the significant auto related claims companies are addressing following flooding in Northern Alberta and hail in Calgary.

IBC and its members believe that Albertans deserve affordable auto insurance. And we’ve made recommendations to the government on how to achieve this goal while ensuring that Albertans have the ability to choose the coverage that makes sense for them and the ability to access the care they need if they’re in a collision. Our recommendations are not what FAIR claims and can be publicly found here.

FAIR’s assertions do beg the question: How much will lawyers make over 2019 and 2020? Who knows? They aren’t legally required to disclose their earnings. Perhaps one question we should all be asking is: What’s motivating FAIR? Regardless, Alberta’s insurers will be focusing their efforts on affordability for drivers.

Updated June 28, 2020

Honesty in Insurance – The Facts that Drivers Deserve

Alberta’s auto insurance system isn’t working for its 3 million drivers. Drivers have said they want affordable premiums, more choice, and care when they need it. To deliver a system that Albertans want, we need to examine and consider reliable data.

Unfortunately, on February 13, a group funded by personal injury lawyers, released data they claim is based on a report from Oliver Wyman (the government’s actuary). However, not one of the numbers they cite in their release can be found in the government’s report. Not one.

The fact of the matter is, the report – that is available to the public – shows that between 2015 and 2018, bodily injury costs per vehicle increased by 20%, and the average claim size increased by 25% over the same period of time. It also shows that this trend has been going on for many years.1 Indeed, the report confirms that based on the most recently available data, bodily injury costs per vehicle increased by an average of 7.1% per year since mid-2011. What does this mean for the Alberta driver? Costs in the auto insurance system are increasing.

The government report also projects that many insurance costs will increase over the next year, including bodily injury costs per vehicle (up 7%) and accident benefits (up 8.5%), and that comprehensive losses (theft and weather-related claims) will also increase by 6.5%.

These are the facts. According to data from the Alberta Automobile Insurance Rate Board, insurance claim costs are on the rise. To suggest otherwise is incorrect.

Alberta’s auto insurers want to reduce costs and give consumers an auto insurance system they want and frankly, deserve.

__________________________
1Page 54/142, column 14 – from 2012.1 to 2019.1

*Data is for the prior 12 months up to June 30 of each year

Updated February 28, 2020

Letters to the Editor

RE: Opinion – Albertans should brace for impact. Smoky River Express, February 26, 2020

Alberta’s 3 million drivers deserve an auto insurance system that works for them. In that much, I hope MLA Carson and I can agree. But not on much else.

The auto insurance industry warned his government for years that the system needed to be fixed. Yet, in four years, they did nothing to address rising costs or make the system more accessible for drivers. If MLA Carson’s government had made the minor changes that were required and that insurers pointed out five years ago, consumers would be paying less for auto insurance today. It’s as simple as that.

Now we are well past the point of small tweaks and need major changes to fix the system. Consumers have experienced premium increases, though the average increase is around 10%, not the 30% MLA Carson is suggesting. Drivers should shop around to find the best price. You have options.

Today, all stakeholders involved in the auto insurance industry should be working toward a better solution that meets the needs of Albertans. It seems MLA Carson is getting his facts from analysis provided by FAIR Alberta Injury Regulations, a group funded by the Alberta Civil Trial Lawyers Association. A group that, last week, released data they claim is based on a report from Oliver Wyman (the government’s actuary). Yet not one of the numbers they cited can be found in the government’s report. Not one.

We encourage all stakeholders, regardless of what stake they have in the automobile insurance system, to work with the Alberta Automobile Insurance Advisory Committee on outcomes that will improve the system. Alberta’s drivers deserve nothing less.

Celyeste Power
Vice-President, Western
Insurance Bureau of Canada

Updated February 26, 2020

RE: Car crash injury claims aren’t increasing, insurance can handle costs: report – Edmonton Journal, January 21, 2020

Alberta’s three million drivers deserve an auto insurance system that works for them.

All stakeholders involved in this industry should be working towards a better solution that meets the needs of Albertans. To find this better solution requires taking a good look at the long-term data trends and not short term results that do not paint a full picture of what is happening to drivers.

This is the challenge with the report cited in this article. The report, released by a group created by the Alberta Civil Trial Lawyers Association, asserts that bodily injury claims are not the main reason for increasing costs in the auto insurance system. The data presented in this report ignores all of the long-term claims history that is well-documented publicly, by numerous actuaries, including the independent rate regulator’s actuary.

It’s like saying unemployment in Alberta is no longer an issue because there was an increase in job creation during a one month period. That is, clearly, not accurate. Why? Because trends in any data set are not found in short-term pictures, they develop over time.

In addition, while the report’s author agrees that claim costs from bodily injury have increased since 2012, the report fails to mention that these claims costs (which are the costs from settling injury claims after a collision) have not just increased a little bit – they are, in fact, up by 80% since 2011. These numbers are directly from the independent rate regulator’s actuary, and available on its website.

The article also mentions that these bodily injury claims are the reason the rate cap was removed. This is incorrect. The rate cap did nothing to fix claims costs, it simply asked Albertans to pay more down the road.

The auto insurance system in Alberta no longer works for the drivers that depend on it. Drivers deserve affordable premiums, choice and the care they need if they are in an accident.

We encourage all groups, regardless of what stake they have in the system, to work with the government’s Expert Committee on Auto Insurance to develop outcomes that will improve the system. Alberta’s drivers deserve nothing less.

Celyeste Power
Vice-President, Western
Insurance Bureau of Canada

Updated January 21, 2020