A new consumer poll has found that 73% of Alberta drivers feel that government needs to take urgent action to improve affordability of auto insurance.
When asked about options to lower premiums, the vast majority of respondents - 74% - believe they should have more choice and control over their coverage. They were also clear that they do not support a move to a public auto insurance model or a no-fault system that eliminates the right to sue.
“Albertans want more affordable auto insurance, and they recognize the best way to achieve that is by implementing reforms that allow private insurers to offer more choice in their coverage options,” said Aaron Sutherland, Vice-President, Pacific and Western, Insurance Bureau of Canada (IBC). “The provincial government sets the rules for the coverage that Alberta’s auto insurers must sell. Our industry is ready to help design a new system that gives drivers the power to pick the right coverage, at a price that best suits their needs.”
Legal cost pressures also emerged as a key concern in the poll. When asked about the main factor behind challenges in Alberta’s auto insurance market, 74% of respondents indicated that personal injury lawyers are driving up the cost, and 81% believe government should take action to address this challenge.
“Legal costs now account for a greater portion of the premiums that drivers pay in Alberta than anywhere else in Canada, and this only continues to grow,” said Sutherland. “The survey results confirm that Alberta drivers understand the impact that legal costs have on the premiums they pay, and they are keen to see government take action.”
A recent report by MNP found that lawsuits and legal costs associated with insurance claims have soared 31% in Alberta since 2018 and now account for about 20% of driver premiums. Costs pressures from litigation and legal fees are double those in Ontario and over three times as high as in some Atlantic provinces.
The poll also found that 70% of respondents do not support a government-run monopoly selling auto insurance and 56% are opposed to a no-fault insurance model, which eliminates the ability to sue after an accident and creates strict limits on treatment and care for those injured. Full poll results can be accessed here.
In November 2023, the Alberta government introduced a ‘good driver’ rate cap as a short-term solution while it explores “all options available to the province” to improve the affordability of auto insurance for drivers. IBC has proposed changes to the auto insurance system that would give drivers more control over their coverage options, including the ability to waive a cash settlement for pain and suffering following a minor injury, while doubling the amount of pre-approved treatment and care for those injured in a collision. When combined with regulatory and tax changes, these reforms could save drivers up to $325 on average per year.
IBC’s proposal, Enhancing Care & Expanding Choice, builds on an effective real-world model in place in New Jersey, where drivers have seen stable rates for more than 20 years. In Alberta, these reforms would establish a balance between the current system and a pure no-fault model that would eliminate the ability for those injured in a collision to sue.
To learn more about how Alberta’s home, car and business insurers play a key role in supporting the provincial economy, visit IBC’s InsurEconomy 2024 webpage.
Yorkville Strategies conducted the survey of Alberta drivers from February 1 to 7, 2024, which included 800 telephone interviews. The poll has a margin of error of +/- 3.5%.