Although 2020 was a rough year, one silver lining is that because Albertans were moving around much less, there were significantly fewer vehicle collisions. Just before the new year, a study by Hellosafe.ca revealed that there had been a 28.1% drop in car accidents across Alberta, with Calgary leading the pack with a decrease rate of 32.25%. Close behind is Edmonton, with a decrease rate of 31.89%. This is not surprising, as most accidents tend to occur in the more densely populated areas, and Edmonton and Calgary are Alberta’s largest cities.
Hellosafe.ca estimates this led to savings for insurance companies of about $745 million, with Calgary and Edmonton alone accounting for $231 and $172 million less in in car insurance claims. Red Deer, Lethbridge, St. Albert, and Medicine Hat all recorded decrease rates of more than 31% as well, which leads to another $58 million in savings. In fact, across Canada there was a huge reduction in car accidents of 32.9% on average, leading to $6.7 billion in savings. Ontario, Quebec, and B.C., showed the largest decrease in insurance claims, followed by Alberta.
The numbers presented by Hellosafe.ca are upheld by Calgary Police Services’ own data, which logged 20,363 reported collisions in 2020, compared with 31,765 the previous year, a decrease of about 35%, says this Dec. 21 article by the Calgary Herald.
The Insurance Bureau of Canada (IBC) says that their complete data on claims in 2020 won’t be available until sometime this year, however. In the meantime, Aaron Sutherland, a vice-president of the IBC, says in the Herald article that the industry is aware of claims being down, and has passed car insurance savings on to customers to the tune of about $300 per driver, or $279 million, already. Sutherland also cautions that even though the total number of car insurance claims is down, the cost per claim is up due to higher-damage collisions, which they say is due to fewer cars on the road.
How to access your car insurance savings
Since the vast majority of Albertans – especially Calgarians – saw their rates rise 22% on average in 2020, some car insurance savings would be a welcome relief. We advise that you don’t wait until your car insurance renewal time to see if you can access savings, especially if your driving habits have changed. You can more than likely access immediate car insurance savings if you are working from home and your commute times have lessened.
Additional help is also available for those whose income has dropped due to the pandemic. Temporary suspensions of policy termination for non-payment, no fees for non-sufficient funds, and flexible payment options are being offered by insurance companies. They are also working with their clients on a case-by-case basis to provide some sort of premium relief if warranted.
What’s being done about rising car insurance rates in Alberta?
The real story on why insurance rates have been rising in Alberta is complicated. In 2020, the Alberta Automobile Insurance Rate Board (AIRB) allowed for companies to implement as much as a 30% rate hike, which they said was intended to help increase competition and make insurance “accessible, equitable and sustainable” for Albertans. This erased the yearly 5% rate hike cap established by the previous government. The reasons for the approval of the increase are multi-layered, and are meant to address concerns from insurance companies that they could not profit in the province anymore. Experts say the 5% cap discouraged companies from operating in Alberta, decreasing competition and leaving consumers with less choice. Less choice can lead to paying a lot more for a lot less.
Hardly any Albertan with a vehicle saw car insurance savings last year, however, so it remains to be seen if the early moves made by the AIRB will eventually work for the benefit of consumers. But later on in the year, a bill passed by the Government of Alberta is expected to help bolster an increase in car insurance savings for consumers. Bill 41 brought in changes to the minor injury regulation in Alberta to include injuries such as sprains, strains or whiplash-associated disorder injuries under the cap for damages payable at about $5,000. The bill also introduced the ability for insured parties to recover their losses for damage to their vehicle or personal property by an at-fault driver directly from their provider. This takes the third party out of the equation, speeding up the claims process, and is a sign that Alberta may soon be moving to a completely no-fault insurance system as recommended by a government committee currently in place. Finally, Bill 41 paves the way for more usage-based insurance options in the province, where devices placed in a vehicle or installed as an app on telephones gather data regarding drivers’ habits behind the wheel. If you demonstrate safe driving habits consistently, you can earn car insurance savings of up to 25%.
Insurance brokers can help you find car insurance savings
In addition to extensive customer resources, outstanding claims support and value-added service, insurance brokers are experts at accessing the best possible car insurance policies at the lowest rates available. Lane’s Insurance is a leading Alberta-based brokerage working out of Calgary, Banff, Edmonton and greater Alberta.