Pretty much every Alberta car owner saw a rise in the premiums this year. A Government of Alberta decision that removed a maximum 5% annual bump in car insurance rates led many insurance companies to apply for permission to raise their premiums, and from what we’ve heard from our clients and seen from reports in the news, people saw from as little as nothing to as much as a 20% hike in their premiums.
Car insurance rates are rising because, according to this Global News article, for the last five years insurance companies have been paying out an average of $1.12 in claims, taxes, and operating costs for every $1 brought in. That is a loss of 12 cents on every dollar, explains the Insurance Bureau of Canada’s western vice-president Celyeste Power, something that is untenable considering the increase in both the number and cost of car insurance claims in the province.
Some of us may have gotten a temporary reprieve on our car insurance payments due to COVID-19. If you are continuing to work from home and your driving habits have changed substantially, don’t forget that you can still call your provider to inquire about options such as:
- Reduced premiums for less driving
- Flexible payment options
- Temporary suspensions of policy termination for non-payment
- Not processing fees for non-sufficient funds
Many people have returned to a relative “new normal” by now, taking themselves to work and their kids to school. The Canadian Underwriter says that people are starting to drive again, according to information gleaned from Apple Maps. As of the beginning of August, Apple Maps had received an average of 18% more requests for directions (with Calgary at 24%) across the provinces than at the start of the pandemic lockdowns, when requests were down from about 58% to 65%. As the economy slowly begins to gain speed again and more drivers take to the roads, car insurance companies are starting to watch for car insurance claims frequencies to rise.
An option for those who are struggling with their car insurance payments could be moving to usage-based insurance. Also known as “telematics,” Intact has rolled out their usage-based insurance program in Alberta and it is ready to access for provincial drivers. It could be possible to save as much as 25% on your car insurance rates by joining Intact’s My Driving Discount program.
Usage-based car insurance is run through an application for your mobile phone. The technology sends information about your driving habits to the app so that drivers receive real-time information on how they are performing. It records behaviours such as hard braking, rapid acceleration, and time of day.
Remember, however, that you can’t check your phone while driving! That would qualify as distracted driving, and the consequences of a ticket can be harsh, including the cancellation of your insurance.
Drivers enrolled in the usage-based insurance program My Driving Discount can earn a one-time discount of up to 10% for initially enrolling in the program, and demonstrating good driving habits after nine month of having the app can earn you up to 25% your total car insurance costs.
Data collected by usage-based insurance companies has demonstrated a reduction in dangerous driving events for fleet operators using telematics. When drivers know they are being observed, they simply act better behind the wheel. Several finding have been noted, including:
- Unsafe events, which are described as quickly speeding up, braking hard, and changing lanes suddenly, decreased by nearly 50%
- Speeding was reduced by 97%
- An improvement in fuel economy of between 5% and 9% was recorded
- An overall significant improvement in driving habits was noted
Usage-Based Insurance and Your Privacy
Many people have expressed concern about sharing their personal driving data on an open network, and rightly so. Privacy is paramount when it is so easy to have your details stolen or shared by unscrupulous hackers. If you have questions about how your information might be shared, it is recommended that you contact your insurance company’s Privacy Office for details on how they collect, disclose, and protect private information.
Usage-Based Insurance for Fleet Owners
Usage-based insurance is available for fleet owners in Alberta, and has been for several years now. It’s a practical way for fleet owners to reduce their car insurance costs as well as lessen wear and tear on their vehicles.
- It allows business owners and commercial fleet managers to track the driving habits of employees, helping them assess and reduce risk
- It gives business owners and fleet managers important insights into vehicle expense accruals (related to fuel consumption, vehicle maintenance and repair, etc.)
- It can detect when a particular vehicle has been unused for an extended period of time, and adjust that vehicle’s coverage accordingly
Get More from Lane’s Insurance
Lane’s Insurance is a leading Alberta-based brokerage, offering highly competitive rates on auto insurance and all other insurance needs. Because Lane’s is a brokerage, we can cross-compare several policies to allow you access to the best coverage at the lowest rates.
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