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Understanding the recent increase to basic auto insurance in Alberta

Many people started 2018 off with a surprise increase to car insurance quotes.  The increase to Edmonton auto insurance quotes was part of a rate increase mandated by AIRB to insurance companies all across the province. Keep reading to find out how the increase might affect you.

Renewing Drivers Permit

What is AIRB?

AIRB, which stands for the Automobile Insurance Rate Board, is the regulatory board responsible for monitoring and adjusting the cost of auto insurance in Alberta. The board was established by the Minister of Finance and Alberta’s provincial government. The mandate of the AIRB is to make sure that the best interests of the citizens, businesses and government of Alberta are being served in regards to automobile insurance.

How auto insurance rate increases are determined

Every year, the AIRB conducts a review of auto insurance rates in Alberta. This review determines whether or not rates should decrease, stay the same, or increase at the start of the next year. Some of the factors that the AIRB takes into consideration when compiling its report are:

  • The strength and profitability of the insurance industry in a given year
  • The importance of providing rates to the public that are both fair and stable
  • The projected stability of auto insurance rates over the next 3-5 years

Other factors that can influence car insurance quotes within the province are:

  • The strength of the Canadian dollar
  • The cost of the average auto insurance claim payout
  • The number of fraudulent insurance claims in a given period
  • The frequency and severity of natural disasters within the province

The Grid System

The Grid system provides insurance brokerage firms in Edmonton and throughout the province with guidelines for the maximum amount they can charge for basic automobile insurance. The Grid ensures that all rating and premium calculators are in line with provincial standards and don’t exceed the amounts determined on the Grid.

What it means for you

The AIRB has mandated a 10% increase to basic auto insurance rates on the Grid system as of January 2018. Most insurance brokers charge rates that are well within or even less than, the amounts recommended on the Grid. However, a 10% increase across the board may mean you’ll pay more for auto insurance in 2018 than you did in 2017.

Talk to one of our insurance brokers to find the best policy for your needs. At Drayden Insurance in Edmonton, we’re happy to answer all of your questions and offer you insurance that protects your interests at a price you can afford. Contact us today to learn more about the insurance products we carry, or to request a quote.

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