5% hike set for Alberta's mandatory car insurance
Albertans can expect to pay five per cent more for their mandatory auto insurance starting in November.
The Alberta Insurance Rate Board announced Thursday that it is allowing the increase in premiums as a result of its annual insurance rate review. The increase means that on average Alberta drivers could pay an additional $30 per year for their mandatory insurance coverage.
"Alberta consumers continue to have access to fair and affordable auto insurance," board chairman Alf Savage said in a release.
"While the cost of mandatory coverage rises slightly to reflect increased costs for insurers, premiums are still 13 per cent lower than they were prior to the auto insurance reforms implemented in 2004."
During public hearings held in June, the Insurance Bureau of Canada asked the board to hike premiums by 37 per cent, which would have meant a jump of up to $200 a year for the average driver.
Insurance companies said the marketplace is unstable right now in the wake of a court ruling earlier this year when a judge struck down Alberta's $4,000 cap on non-pecuniary damages for some soft tissue injuries.
Associate chief Justice Neil Wittman of the Court of Queen's Bench ruled in February that the government's cap was unconstitutional because it discriminates against specific victims of vehicle accidents.
The decision led insurance industry officials to predict auto insurance rates would jump by about $200.
An appeal of that decision is scheduled to be heard in September.
Savage said Thursday the process of striking a new rate became more complex this year because of the court decision striking down the Minor Injury Regulation.
"This resulted in a change in the insurance product and increased costs to insurers. The court decision has been appealed, but without knowing the outcome, the AIRB has had to factor this uncertainty into its rate review," he said.