Jackie Doell, owner of Medicine Hat's A-WIN Insurance, talks about the increases in auto insurance rates. (CHAT News photo)

By Alex McCuaig

Insurance increasing

Auto insurance rates climb in Alberta following lifing of rate cap

Feb 20, 2020 | 5:26 PM

MEDICINE HAT, AB – Auto insurance rates are on the increase in Alberta with Statistics Canada’s latest inflation numbers showing a nearly 18 per cent rise in the cost to cover a passenger vehicle.

But the reasons for the increases are due to the cost of doing business in a province that capped the amount insurance companies could charge customers over the past two years, say those in the sector.

Jackie Doell, owner of Medicine Hat’s A-Win Insurance, says insurance is a business like any other and the decision to put a cap on rates by the NDP government in 2017 saw the sector struggle.

“The insurance companies were losing, on average, 30 cents per dollar on a claim,” said Doell. “So what business can really function and be sustainable if they keep losing money on every dollar they spent.”

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Doell said costs to insurance companies continued to outpace the five per cent annual cap placed on the sector. Costs she says is due to the increase in the cost to repair modern vehicles as well as the amount of injury claims paid out and growing levels of insurance fraud.

She added that since the cap has been removed, companies can apply to increase the rates for liability insurance to the sector’s regulatory body.

“They are allowed two times a year for this and this (insurance) council has put it at a cap of 20 per cent,” said Doell, adding that companies can’t hike rates at the full amount on one go.

As for ways to mitigate additional costs, Doell provided some common sense solutions.

“Follow the rules of the road, be defensive drivers, don’t get tickets – especially with distracted drivers tickets. Those are surcharges now on many policies,” she said.

The provincial government opened an online survey this week to help find solutions to the rising cost of insurance in Alberta.