Rapidly rising claims costs, particularly costs for settling claims associated with minor injuries after a collision, has been the biggest factor in premium increases for Alberta drivers. Changes to the auto insurance product, such as recent 2020 reforms, help drive down the costs of claims which help bring premium stability for consumers.

To put things into context, according to data from the General Insurance Statistical Agency (GISA) between 2011 and 2021 the average size of a bodily injury claim increased significantly, by approximately 73%. As claims payouts increased, insurance premiums had to rise to cover those costs.

Changes to the minor injury definition mean that court settlements for common minor injuries such as sprains, strains and whiplash will no longer be in line with far more serious injuries. There were also changes to the interest paid on pain and suffering awards, which had been far above today’s interest rates and had been contributing to rising claims costs.

The insurance industry estimates that these reforms have helped stabilize premiums.