Alberta brokers are warning that drivers across the province are increasingly unable to secure the auto insurance coverage they need, as the impact of a three-year rate cap continues to ripple through the market.
The Insurance Brokers Association of Alberta (IBAA) said insurers are scaling back coverage or withdrawing from the province altogether, leaving fewer options for consumers and raising the risk that more drivers will be underinsured or forced to pay out of pocket in the event of a collision.
“An insurance broker is a driver's best resource to secure the best coverage at the best possible price,” said Jhnel Weller-Hannaway (pictured above), CEO of IBAA. “Unfortunately, as auto insurers reduce available coverages or withdraw from the Alberta market due to the rate cap, brokers are increasingly unable to find coverage options that are both accessible and affordable for many drivers in the province.”
The cap was introduced to control rising premiums and ease the burden on consumers. But according to brokers, the policy is having the opposite effect.
IBAA reported that motorists are struggling to find mandatory coverages, particularly for leased vehicles that require collision and comprehensive insurance, and that drivers with prior claims or traffic violations are being left with limited or unaffordable options.
Some carriers have already exited the Alberta market, and IBAA warned that those remaining may be forced to raise premiums to cover future losses. Alberta currently has the second-highest auto insurance premiums in Canada.
The group is also questioning the long-term viability of the government’s proposed Care-First model for auto insurance reform. While the model aims to prioritize treatment for injured drivers, Weller-Hannaway said the cost pressures created by the rate cap could undermine its success. She added that allowing continued access to the courts could drive up legal costs, potentially making Alberta’s care-based system the most expensive of its kind in Canada.
“There is still time for the government to succeed in its goal to build a better, more affordable system,” she said. “We implore the government to lift the rate cap so that competition and choice can return to the market. We strongly recommend adoption of reforms that focus on care, while improving premiums cost and accessibility for consumers whether or not they are involved in collisions.”
IBAA is calling for urgent action, arguing that without changes to the current policy environment, brokers will continue to face difficulties placing coverage, and more drivers may be left without the protection they are legally required to carry.
