Alberta now promising 5% rate reduction

The Alberta government is now promising drivers a minimum 5% rate reduction as a result of auto reforms being put in place. Earlier indications were that the average rollback would be 10%.The Alberta government release also indicates the 5% reduction will be seen by “good drivers”, and that the reduction remains tied to reforms which have yet to be finalized. Speaking at the Independent Insurance Brokers Association of Alberta (IIBAA) conference earlier this week, Assistant Deputy Finance Minister Dennis Gartner said those reforms should be finalized in “the next few weeks”.”There has been a lot of speculation about what our reforms would mean for consumers, but this shows we are keeping our promise to put consumers first,” says Finance Minister Patricia Nelson. She refers to the proposed “premium grid” system, which would have a base premium set and then move drivers up or down this grid based on driving record (other factors such as age, gender, etc. will be banned as underwriting criteria). “Inexperienced drivers” will stand to gain under the system the government acknowledges, with their rates dropping by as much as 75%.Rates for drivers who have not had their circumstances change (i.e. by a black mark on their driving record), by mid-2005, still be at October, 2003 levels. And, 80% of drivers who are below the base due to clean driving records will be the ones to see the 5% reduction. Overall, Nelson says the 5% reduction will net $300 million in premium reductions.