- No-Fault Insurance in Alberta
- Accident Benefits Alberta
- Uninsured Motorist coverage Alberta
- Subrogation in Auto Insurance
- Finding Cheap Car Insurance in Alberta
- Best Auto Insurance in Alberta
- Car Insurance Rates in Alberta
- The Grid Automobile Rating Premium Rating System
- Auto Insurance Regulations in Alberta
- Car Insurance in Alberta FAQs
Car insurance in Alberta is sold and distributed by private Insurance companies. Private Insurers use direct and indirect distribution channels to sell to the consumer public. Alberta car insurance is sold by Insurers directly or through the use of insurance brokers or agents
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No-Fault Insurance in Alberta
Alberta does not employ a “no-fault” car insurance plan for vehicle damages but does for injuries. This means that if you’ve sustained injuries in a car accident you would need to claim through your own insurance company, not the insurance company of the at-fault driver. However, for vehicle damages “no-fault” does not exist and Alberta claims adjusters use the ordinary rule of law to adjudicate auto insurance claims.
An option usually exists to either claim through your own auto insurance company or the insurance company of the responsible party for the damages to your vehicle, along with any loss of the use of the vehicle (rental) while being repaired. Careful of what you choose as replacement value can only be claimed through your auto insurance policy. Indemnification from a third party is based on the legal principle of Actual Cash Value (ACV – the cost to replace or repair said damages of like, kind, quality, less depreciation). If you decide to claim with the Insurer of the at-fault driver, keep in mind that they do NOT have to pay replacement value.
For example, if someone causes damages to your brand new vehicle and you decide to claim from the Insurance company of the at-fault driver, you would only receive a depreciated amount, even though you’ve purchased replacement cost coverage from your own car insurance company. Replacement cost coverage does not consider depreciation and allows you to replace the damaged item to the original condition. Speak to your insurance representative about your options if placed in this scenario.
Accident Benefits Alberta
Accident benefits in Alberta are compulsory auto insurance coverage like in every other province. The only exception is Newfoundland were they can opt-in or out of accident benefits coverage.
Accident benefits car insurance coverage in Alberta serves to provide benefits to drivers and passengers involved in a vehicle accident, regardless of fault. Accident benefits in Alberta cover the out of pocket medical expenses for treatment and recovery.
As mentioned earlier, accident benefits in Alberta are based on the “No-Fault” system for injuries sustained in a motor vehicle accident. This means that you would need to claim through your auto insurance policy for injury benefits.
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Uninsured Motorist coverage Alberta
Uninsured motorist coverage in Alberta is compulsory auto insurance coverage, not unlike most provinces in Canada. Coverage is meant to provide indemnification for property damages and injuries sustained when an uninsured or unidentified person is at fault for the incident.
Subrogation in Auto Insurance
Subrogation is a legal principle used by insurance claims adjusters to recover paid losses from at fault insurance companies.
Subrogation in insurance means that your legal right to recovery from the At-Fault party has contractually, been transferred to your insurance company. Your insurance company would be responsible for recovering any claim settlement payout without interference from you. This isn’t something to take personally but intervening in a subrogation opportunity can sometimes jeopardize or prejudice the entire process and possibly leave you in a position where your deductible may not be fully recoverable. It’s important to let your insurance company investigate, negotiate, settle claims and seize on subrogation opportunities.
Finding Cheap Car Insurance in Alberta
The secret to finding cheap car insurance in Alberta, like in many other privately run insurance provinces, is shopping and comparing prices from as many Insurance companies, insurance brokers or agents as possible. If your goal is to find the cheapest car insurance, and the price is the most important factor to you then you should be looking for car insurance quotes approximately 30 days before your renewal if applicable to you. Prices of auto insurance in Alberta fluctuate regularly and car insurance quotes are usually good for one month before lapsing, so it’s important to shop around as much as possible within that time frame to secure the cheapest rate.
Best Auto Insurance in Alberta
Everyone has different insuring requirements which might make one insurance company a better choice than others. Asking what is the “best” auto insurance company in Alberta is a subjective question. As mentioned above, your definition of what constitutes the best insurance company can depend on what’s important to you.
For many, price is the most important factor, while others consider customer service, or superior and competent claims handling as the utmost important factor that might influence a purchasing decision.
Car Insurance Rates in Alberta
Car insurance rating in Alberta is similar to other car insurance rating systems models used by insurance companies in other provinces, but with a distinct difference.
Auto insurance premiums in Alberta usually take into consideration:
The vehicle itself – based on insurance bureau statistics that measure the likelihood of an injury or extent of damages of a vehicle based on make and model of car.
Postal Code – where you garage the vehicle, usually where you live in a personal auto insurance policy
Driver Behaviour – this is pretty self-explanatory; if you have a driving history full of driving violations and traffic tickets, and accidents, you’re likely to pay more than someone who has a cleaner driving record.
Driving Experience – Years licensed and insured also play a factor in determining your car insurance premium in Alberta.
Car insurance rates in Alberta are based on a two-model system. One system of car insurance rating is a traditional system comparable to other provinces. The other system is called the grid system.
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The Grid Automobile Rating Premium Rating System
The grid rating program was designed by the government of Alberta to keep car insurance prices at reasonable prices. The risks that fall under the grid rating plan are often considered “high risk” or substandard. Because of this, an insurance pool was set up with the residual insurance company called the Facility Association so that auto insurance can be accessible to all Albertans regardless of driving record.
The grid outlined the maximum car insurance premium that an insurance company can charge for basic coverage, regardless of driving record.
Insurance companies then compare car insurance premium generated by the Grid system to their rating program and choose the lesser of the two quotes. You can argue the grid system is a consumer protection measure for Albertans, although most insured drivers in Alberta fall below Grid premiums.
Auto Insurance Regulations in Alberta
Car insurance in Alberta is regulated by the Automobile Insurance Rate Board (AIRB). The AIRB is responsible for ensuring the auto insurance market for private passenger vehicles, in Alberta is fair to the consumer, and to provide efficiency and effectiveness to this main goal.
Car Insurance in Alberta FAQs
How can I lower my Car Insurance in Alberta?
Lowering the cost of car insurance in Alberta can be done by:
Thoroughly shopping around – shopping from different distribution channels such as an Insurance Brokerage, Agency or a direct writer insurance company can generate different prices with comparable coverage. Get as many auto insurance quotes from as many sources as possible. The exercise may seem time consuming and tedious but might help you save money!
Combining Home and Auto Insurance – insurance companies in Alberta offer big discounts for combining your home or habitational insurance with your car insurance. Discounts anywhere from 20% to even as large as 40% are common for bundling your insurance under one company! You can even benefit from a multi-vehicle discount when adding additional vehicles to your auto policy.
Increasing your deductible – a deductible, also called a Self-Insured Retention (SIR), means that you must pay the first portion of a covered loss in a car insurance claim. Increasing your deductible shows the insurance company that you’re willing to pay more out of your own pocket for covered losses. Deductible amounts in Alberta typically can range from $300 to $1,000, with higher deductible amounts not unheard of. The cost savings from increasing your deductible isn’t going to be a drastic reduction in insurance cost, but still a way to save some money!
Substituting your vehicle – although your driving record and prior claims history make of the bulk of your auto insurance cost, there’s an opportunity to save money by switching to a different vehicle. Auto insurance companies in Alberta use the CLEAR model for rating the vehicle in itself. CLEAR stands for Canadian Loss Experience Automobile Report and provides statistical data on the likelihood of injuries, damages or loss associated with a particular make and model of vehicle involved in an accident or loss.
Reducing Insurance Coverage – it’s probably not a good thing to reduce insurance coverage, but if you must, it might save you some money. Speak to your insurance representative about the repercussions of reducing or eliminate insurance coverage.
Is car insurance mandatory in Alberta?
Car insurance in Alberta is a legal requirement to cover any damages or injuries you may cause to others while operating your vehicle. Also, you wouldn’t be able to register your vehicle or renew your license plates without proof of insurance. Mandating auto insurance in Alberta, like the rest of Canada, is a consumer protection measure to help mitigate the chances of not recouping loss or damage from a responsible driver.
How to find cheap car insurance in Alberta?
Finding the cheapest car insurance rate in Alberta requires the same exercise as trying to find cheap car insurance anywhere else in Canada. In order to find cheap or cheaper auto insurance in Alberta you need to shop and get as many quotes as possible, from various distribution channels.
The three main distribution channels for car insurance in Alberta are:
An Insurance Broker: an insurance broker is an independent intermediary who sells and distributes the product and services of more than one insurance company. An insurance Broker may have distribution agreements with many auto insurance companies, which would open the door to multiple car insurance quotes. It’s a “no brainer” that the more options you can select from the higher the chance a cheap or more affordable option can present itself. The most important factor in securing an affordable car insurance quote is to find an Insurance Brokerage with as many distribution agreements with Insurers as possible. The more distribution agreements an Insurance brokerage has with Insurance companies the better the chance of you securing a lower rate. The more insurance companies you can get a quote from the better your chance of getting a cheaper car insurance quote. This applies anywhere in Canada not just Ontario or Toronto. Shop till you drop and know that insurance brokerages are not created equally. That is, don’t assume that any insurance broker can provide the same insurance rate as any other broker.
An Insurance Agent: insurance agents have the same fiduciary duty as an insurance broker but instead of representing many insurance companies, they mainly sell the insurance products of one insurer. Insurance agents in Alberta are employed by one company and have the authority to sell directly to the consumer public. Some argue that purchasing car insurance from an insurance agent is cheaper than an independent Insurance broker, since the insurance company doesn’t have to pay a commission to an intermediary or “middleman”. The cost savings from not having to pay an insurance broker would be passed to the customer. Examples of an Insurance Agents would be employees who work for TD, RBC and Belair, just to name a few.
Independent Insurance Agent – an independent Insurance agent is very similar to an Insurance agent but works as an independent contractor. From a legal business structure, independent insurance agents are separate from the insurance company they represent. Although an independent insurance agent is a separate legal entity from the insurance company, they typically sell the insurance products of one company. A good example of this would be State Farm Insurance or Desjardin. An Insurance Agent: insurance agents have the same fiduciary duty as an insurance broker but instead of representing many insurance companies, they mainly sell the insurance products of one insurer. Insurance agents in Alberta are employed by one company and have the authority to sell directly to the consumer public. Some argue that purchasing car insurance from an insurance agent is cheaper than an independent Insurance broker, since the insurance company doesn’t have to pay a commission to an intermediary or “middleman”. The cost savings from not having to pay an insurance broker would be passed to the customer. Examples of an Insurance Agents would be employees who work for TD, RBC and Belair, just to name a few.