Do you have questions about auto insurance in Alberta? Call IBC’s Insurance Hotline at  1-844-2ask-IBC.

Frequently Asked Questions

Auto Insurance Reform

What does Direct Compensation for Property Damage (DCPD) mean for Alberta drivers?2021-11-01T11:55:50-04:00

On January 1, 2022, Alberta will adopt a Direct Compensation for Property Damage (DCPD) system – which will improve the way Alberta’s insurers support their customers following collisions. You can learn more about DCDP at

What do the changes to Alberta’s auto insurance system mean for consumers?2022-03-15T12:16:54-04:00

The changes the government made to the auto insurance system focus on controlling claims costs, which helped stabilize premiums for consumers and make insurance more affordable. Changes to the insurance system will also increase medical care for Albertans injured in collisions by providing more pre-approved treatment for people who are injured.  Learn more about these changes to the insurance system and others here.

How does government changes to auto insurance help consumers save money?2022-03-15T12:18:37-04:00

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.

To put things into context, between 2011 and 2019 the average size of a bodily injury claim went up by approximately 80%. 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.

What changes did the government make to fix the system?2022-03-15T12:19:11-04:00

The Alberta government’s changes to auto insurance are designed to reduce red tape, increase medical care, expand options for drivers, and make auto insurance more affordable. They include improving the medical care Albertans receive if they are in a collision and giving drivers more choice by allowing innovative and flexible options such as pay-per-kilometre insurance.

Why focus on settlements for minor injuries and awards given to drivers in court?2022-03-15T12:22:08-04:00

Disproportionate pain and suffering awards for sprains and strains are making insurance unaffordable for everyone.

Regulations that governed awards for minor injuries ultimately impacted every driver. It was where the insurance system saw the largest drain on resources, and also where few consumers actually saw benefit. This money and resources used in this portion of the system does not go toward helping drivers recover.

In fact, since challenges to the Minor Injury Regulation in 2012, claims costs associated with bodily injury increased by nearly 8% per year, going from an average of $41,534 in 2011 to $74,193 in 2019. Over that time, insurers paid out considerably more in claims, expenses and premium taxes for every dollar they collected in premiums. As a result, Alberta drivers now pay the third highest premiums in Canada.

What changes have been made to the minor injury definition?2022-03-15T12:23:31-04:00

Since a 2012 court decision allowed for an unintended interpretation to the definition of minor injuries, claims costs increased significantly.

Recent changes announced by the government has revised the definition of a minor injury so that settlements for common sprains, strains and whiplash injuries should no longer be for amounts in line with far more serious injuries. More serious injuries, such as fractures or those that have a permanent negative or life-altering impact, are not considered minor.

The insurance industry estimates that the reforms can help reduce claims costs enough to stabilize premiums. Reforms also mean accident victims with more serious injuries will now have access to more of the care and benefits needed to recover.

Who decides what is considered a minor injury?2020-12-17T09:54:30-05:00

The insurance industry believes that the definition of a minor injury should be determined by prevailing medical literature, not insurers or lawyers.

Who determines the level of care that collision victims receive?2022-03-15T12:25:09-04:00

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.

What do reform changes mean for Alberta drivers whose vehicles are damaged in a collision?2022-03-15T12:26:22-04:00

With changes announced by the government in Bill 41, it is now more convenient for drivers to get their vehicle repaired or replaced after an accident. Prior to the changes, a driver whose vehicle was damaged in a collision would need to work with the at-fault driver’s insurer to coordinate repairs or the replacement of their vehicle. Now, drivers can seamlessly work with their own insurer on all claims and repairs.

What’s next for the Insurance Industry in Alberta?

Insurance Bureau of Canada and the insurance industry is committed to continuing to work with the government and other stakeholders on further improving our Alberta’s auto insurance system. Bill 41 is a great step forward, but as efforts continue in working to stabilize premiums and maintain affordable options for consumers, the insurance industry believes bringing a hybrid insurance system to Alberta is a long term solution for bringing a stable insurance system to the province.   A hybrid system, that provides choice and control in what kind of policy consumers want, along with increased levels of care is the best way to go for Albertans.

I’ve heard that insurers want a no-fault auto insurance system that will take away benefits?2022-03-15T12:27:02-04:00

IBC and its members are not advocating for a no-fault auto insurance system. We are advocating for balanced changes to the current auto insurance system that will keep auto insurance affordable while increasing choice and care for those who need it.

All the data shows that the insurance system is no longer working for Alberta’s 3 million drivers.

How will fewer insurance regulations benefit consumers?2022-03-15T12:29:33-04:00

The insurance industry believes in fair and balanced regulations. In fact, we believe the auto insurance industry should be regulated. Regulations should protect consumers from risk, but not prevent choice, innovation and change.

The right regulations in place makes it easier for insurers to better serve consumers as they are allowed to more easily and efficiently provide the products and services consumers expect and deserve.

The right regulations in place creates an environment where insurers can be more responsive to the needs of consumers and also provides consumers with access to more choice and innovative products. For example, with Bill 41 now in place, insurers should be able to give consumers the choice to have their premiums based on how often they use their vehicles and how they behave behind the wheel. This is good for drivers.

Removing or updating outdated and cumbersome regulations is a win for Albertans. It will make insurance more affordable for consumers and continue to stabilize the province’s insurance market.

Why did the government have to take an active part in fixing insurance?2020-12-17T10:20:17-05:00

Insurers and insurance intermediaries cannot ­fix the auto insurance system themselves. The Alberta government sets the rules that insurers must follow, including the prices insurers can charge. Alberta’s insurance industry is dedicated to working with the provincial government to make changes that will lead to a healthier, more sustainable insurance market.

Is a cash settlement the best solution for victims injured in a car collision?2020-12-17T09:58:55-05:00

The best solution should be a focus on providing care so that victims of collisions can recover from their injuries. We believe that for innocent victims of negligent or impaired drivers, the best solution is to get all of the medical care they need to get better.

What will fix the auto insurance system?2020-06-11T14:55:43-04:00

All groups need to work with the government’s expert committee on auto insurance to develop outcomes that will improve the system for Alberta’s 3 million drivers.


Auto Insurance Premiums

How are auto insurance rates set?2020-06-11T14:57:44-04:00

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.

How long does it take to get rates approved?2020-06-11T14:58:18-04:00

After making a rate change proposal, insurers must wait between 30- and 60-days before those rates are approved. After that, consumers are sent renewal notices at least a month before their new rates are proposed to come into effect. In all, it could take more than 90 days from rates being submitted to consumers seeing those rates. Rates posted today were submitted to the AIRB months ago.

What is an insurer’s market share?2020-06-11T15:01:08-04:00

This represents how much premium an insurer writes relative to the total size of the market. The higher the market share, the more policyholders the insurer serves.

What can consumers do to lower their premiums?2022-03-15T14:11:36-04:00

Alberta’s insurers continue to work with the government and stakeholders to advocate for continued balanced changes that will further stabilize premiums for Alberta drivers. There are also 22 insurer groups (or 41 insurers) operating in Alberta that compete for consumers’ business. Consumers should shop around – it is proven to help drivers find better rates.

Since the start of the COVID-19 pandemic, the property and casualty insurance industry has also provided more than $3 billion in personal and commercial insurance relief to help Canadians impacted by the pandemic.

Do insurance companies just file for the highest rates possible?2020-06-11T14:57:27-04:00

No. Alberta has a competitive insurance market and insurers compete for Albertans’ hard-earned premium dollars. Many insurers request less than their justified rates as a consumer focused measure or to try to increase their market share.

The AIRB also closely monitors and approves the rates insurers can charge. No insurer can increase or even decrease their rates without explicit approval from the independent AIRB.

How often do these rate filings happen?2020-06-11T14:58:42-04:00

Filings go to the AIRB on a regular basis. This could be to request a rate increase or decrease or to change how insurers calculate their rates. The AIRB typically posts approved rates on a quarterly basis, which means that some of the decisions were made up to 90 days before the posting. Filing approval decisions are made in accordance with the Automobile Insurance Premiums Regulation.

Why aren’t the rate changes communicated earlier?2020-06-11T14:59:16-04:00

The AIRB does not disclose information about rate filing decisions prematurely for competitive reasons, as it might give other companies an unfair advantage over their competitors.

What are some of the factors that go into calculating drivers’ premiums?2020-06-11T15:00:21-04:00

Auto insurance premiums are calculated using many different factors (e.g., number of years driving, claims history, traffic convictions, where the driver lives, and type of vehicle or coverage selected). Different insurers use their claims data to determine how these factors are weighed. For example, some insurers may place a larger emphasis on number of kilometres driven per year, while others place a greater emphasis prior claims history. Factors used must be authorized by the Superintendent.

Can an insurance company charge whatever it wants for premiums?2020-06-11T14:56:59-04:00

No. Auto insurance in Alberta is heavily regulated. Premium changes are approved by the independent rate regulator, the Alberta Auto Insurance Rate Board. The provincial regulator approves premiums based on data from insurers and the General Insurance Statistical Agency (GISA), which is made up of provincial insurance regulators from across Canada.

Do consumers have to stay with the same insurance provider?2020-06-11T15:01:38-04:00

No. Consumers can choose among different insurers’ pricing mechanisms and benefit options to find a policy that best suits their circumstances. In Alberta’s competitive marketplace, customers can shop around not only for the most suitable product, but also the best price.

Are insurers’ operating costs a contributing cost to premiums?2022-03-17T17:09:04-04:00

According to data from GISA, Alberta insurers’ operating expenses are in line with the rest of the country. Instead, the primary driver behind the increase in premiums is the rising costs of settling injury claims, including legal costs, after a collision. After being stable, the average bodily injury claims cost has increased by nearly 8% per year, from $41,534 in 2011 to $74,193 in 2019, according to Oliver Wyman, the Alberta Automobile Insurance Rate Board’s consulting actuary.

*Sources: 2021 Oliver Wyman Report (2020-2016, p. 12), 2020 Oliver Wyman Report (2015, p. 12), 2019 Oliver Wyman Report (2014, p. 11), 2018 Oliver Wyman Report (2012-2013, p. 13), 2017 Oliver Wyman Report (2011, p.24).


Bodily Injury Claims

Why are the rate increases higher than in past years?2022-03-15T13:18:24-04:00

After years of an affordable and stable auto insurance system in Alberta, claims costs relating to bodily injury claims have skyrocketed by over 88% over the last decade. These costs are driving premiums up. The insurance industry wants to work with the Government of Alberta to fix the issues in the system and deliver an affordable auto insurance product over the long term.

Why do my auto insurance premiums keep going up?2022-03-15T13:21:28-04:00

There’s a big reason – and that’s the rising costs associated with settlements resulting from minor injury claims after a collision. When all claims costs, including operating expenses and premium taxes are accounted for, on average, insurers paid out more than half of every dollar earned in premiums between 2014 and 2020.*

*Source: IBC Facts Book 2021, Page 8

A recent report suggested bodily injury claims are not the main reason for increasing insurance rates. Is this true?2020-06-11T15:19:52-04:00

No, this is not accurate. There is a lot of data from experts including the independent rate regulator’s actuary, Oliver Wyman, that shows bodily injury claims have increased significantly since 2011. These increased claims costs are the primary cause of premium increases in the auto insurance system.

What do bodily injury claims have to do with my insurance premium?2022-03-15T13:27:27-04:00

The average size of a bodily injury claim has gone up by approximately 88% over the last decade, which is a staggering increase. As claims costs increased, insurance premiums had to go up to cover those additional claims costs.



What do I do if I’ve been in an auto collision?2023-01-13T11:26:40-05:00

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.

What should I do if my vehicle has been damaged by severe weather?2023-01-13T11:24:25-05:00

Follow the steps below once it is safe to do so if your vehicle has been damaged by severe weather.

– Assess the damage and call your insurance representative. Most insurers have 24-hour claims services.

– Be as detailed as possible when providing information on damage.

– If possible, take pictures of the damage to your vehicle.

– Be sure to keep receipts related to any cleanup.

Don’t wait until severe weather hits to know if your vehicle is protected. Contact your insurance representative or call IBC’s Insurance Hotline at 1-844-2ask-IBC.

Does insurance cover damages to vehicles caused by severe weather?2023-01-13T11:23:13-05:00

Damage to vehicles from wind, hail or water is covered if you have purchased comprehensive or all perils car insurance. This type of coverage isn’t mandatory, so it’s important to check with your insurance representative to understand what your policy covers. Your insurance representative can also discuss what options are available to ensure your vehicle is covered if severe weather strikes.

Is my mobile home or trailer covered from damage from severe weather?2023-01-13T11:25:01-05:00

Damage to mobile homes or trailers from wind, hail or water may be covered. Contact your insurance representative to find out what your policy covers.

What are the risks of driving distracted?2023-01-13T11:18:03-05:00

Distracted driving is one of the largest causes of collisions, injuries and deaths on Canada’s roads.1 From texting and being on social media to talking on the phone or eating and drinking when behind the wheel, driver inattention has been found to contribute to approximately 80% of all collisions.2

Distractions impair our driving performance and reduce our awareness, which can result in drivers being slower to notice or less able to safely respond to critical events on the road. Put simply, when you take your eyes and attention off the road your risk of collision increases.3

Just look at the numbers:

– It takes only 3 seconds after a driver’s attention has been diverted for a crash to occur. 4

– Sending or reading a text takes your eyes off the road for 5 seconds. At 90 km/h, that’s like driving the length of an entire football field with your eyes closed.5

– You are 23 times more likely to be involved in a collision if you text while driving and 4 times more likely if you talk on a cellphone (hand-held or hands-free) while driving.6

Not only are drivers putting themselves and others at risk when it comes to distracted driving, they may also be breaking the law. And in Alberta, the penalty for distracted driving is a $300 fine and 3 demerit points.

1CAA, 2021
2IBC Drive Down Your Rates
3Transport Canada, 2019.
4, 6Thinkinsure, 2020.
5National Highway Traffic Safety Administration



What is The General Insurance Statistical Agency (GISA)?2020-06-15T16:39:26-04:00

Learn more about The General Insurance Statistical Agency (GISA) here.



What data did you use to determine how much bodily injury claims have risen?2020-07-03T18:30:56-04:00

Insurance Bureau of Canada uses third-party data that is pulled directly from a report from Oliver Wyman, Alberta’s independent rate regulator’s actuary. The report is available publicly on the Alberta Automobile Insurance Rate Board’s website.

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