How are auto insurance rates set?

The Superintendent of Insurance approves rating factors that insurers may use to set their rates, such as where an individual lives and their years of driving experience, among others. In addition, the independent rate regulator, the AIRB, reviews auto insurers’ proposed rate changes, including actuarial assumptions such as projected claims cost increases, operating expenses and maximum permitted profit margins. Based on those factors, it makes a decision on insurers’ requested rate changes. AIRB full rate filing guidelines can be found here.

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

However, on January 26, 2023, the Alberta government announced a freeze on all private passenger vehicle (PPV) auto insurance rate filings until the end of 2023. In its communications, government has been clear that drivers may still see rate increases on their renewals in 2023, due to previously approved rate changes, changes to driving records including at-fault claims and tickets, or changes to insurance profiles such as a new address or a different vehicle being insured.