Report says auto insurance hikes unnecessary
Posted January 22, 2020 11:06 am.
CALGARY (660 NEWS) – Drivers continue to see rising auto insurance rates but one group says the hikes aren’t needed.
Last month, the United Conservative government announced it was creating a panel to review the rise in insurance rates, less than six months after removing the rate cap.
During the press conference, Finance Minister Travis Toews said the cap was just a band-aid solution for the system.
WATCH: Rising insurance rates in Alberta? There’s a panel for that.
According to a report from rights advocate group FAIR Alberta, some insurance companies said there was a crisis in the industry due to a reported rise in bodily injury claim costs.
Actuary Craig Allen, who compiled the report, believes this is false.
“From June 30, 2016, to June 30, 2019, the claims costs are roughly level, and that’s supported by the Insurance Bureau of Canada‘s submission to AIRB, the Alberta Auto Insurance Rate Board.”
In the report, Allen found the AIRB overestimated the severity of claims reported in its 2018 annual report, and has since revised those costs to lower amounts.
He added rates have gone up compared to 2010, but have been steady since 2016.
FAIR Alberta believes insurance companies are looking to change consumer protection laws to pay out less to injured Albertans while retaining more profit, which could lead to higher premiums.
“All this time, insurance companies have been blaming Albertans who have been injured in accidents for rising premiums, but now we have data that says that’s not true,” said FAIR spokesperson Mark Feehan. “We now know injuries aren’t driving insurance rates. We also know many insurers in Alberta are still making tens of millions in profit each year.”
The panel investigating auto insurance rates will deliver its recommendations to the province by this spring.
