Affordability, stability, or accountability: Province asks Albertans what they want from auto insurance

Alberta has the second highest vehicle insurance premiums in Canada, but if the UCP Government were to try and reform the system, what would you like to see?

In a survey open through to June 26, the government breaks it down into five core principles: affordability, stability, simplicity, care-focused, and accountability.

And no, you can’t have all five; respondents are asked to rank these notions by priority.

Another important point being reviewed is the question of if claimants should be allowed to sue at-fault drivers for damages, and who should cover that cost.

In a report commissioned by the Alberta Treasury and Finance Board, third party agency Oliver Wyman and Nous Group has found that if things remain as is in Alberta, premiums will only get worse.

The agency reports the current system, on average, costs Albertans about $1,447 for full coverage. But that will rise to $2,015 as of July 1.

But, there are options that could bring prices down for Albertans.

The report details seven options, the most affordable of which for insurance holders would be a fully public system where a government-backed agency offers both bodily injury and vehicle damage coverage, this would mean premiums of about $1,250 annually.

The next most affordable option is a hybrid system — like what you might find in Quebec — where a public agency covers bodily injury, but private companies cover vehicle and property damage. Premiums of that type of model are estimated to hover around $1,500.

A fully private system is estimated to cost Albertans $1,634 a year, but a fully private system does not currently exist in Canada.

At issue as well is who pays when someone is injured.

The current model in Alberta allows drivers to sue at-fault parties’ insurers for compensation. Changes to no-fault insurance could see motorists instead relying on their own insurer’s care coverage, or another system set up by a public system — foregoing the right to sue and be compensated.

The public report shows moving from an “at-fault” to a “no-fault” system would save drivers money and reduce premiums, but some injury lawyers say that could cost victims in the long run.

A recent poll by Janet Brown Research shows 63 per cent of Albertans prefer the current system which gives drivers the right to use litigation to recover damages.

Premier Danielle Smith directed both President of the Treasury Board and Minister of Finance Nate Horner, and Minister of Affordability and Utilities Nathan Neudorf, to tackle rising insurance costs as part of their mandate letters issued in July 2023.