Final Alberta Reform Package Promises 20% Rate Cut

After months of wrangling, a final package of auto reforms has been released in Alberta, with a promised rate savings of 20% overall. The reforms are to be implemented by September this year, with the province’s “Standing Policy Committee on Economic Developments and Finance” (SPC) recommending a committee be struck to ensure a smooth transition. The provincial cabinet will review the SPC’s recommendations by June.

The auto reform package includes a minimum 5% rate reduction for people with clean driving records, as part of a new “premium grid”. As well, new drivers will see rate reductions of up to 75%, and occasional drivers will only pay up to 25% of their grid rate. The current rate freeze will also be carried through for another year. An “Automobile Insurance Rate Board” will be established after the first year of the program to deal with rate applications.

Against the wishes of insurers, the “take all comers” rule has been implemented which means a company must cover everyone who comes to them for insurance or find another company to do so. The SPC also proposes that other crown insurers such as SGI and ICBC may be allowed to compete in Alberta.

On the claims side, healthcare benefits are being increased to $50,000 from $10,000, but a $4,000 limit has been put on claims for “pain and suffering” or non-economic damages for minor injury – defined as strain, sprain or minor whiplash. A dispute resolution process has been formalized which mirrors that in other provinces. The transition committee is expected to report back in two years time on the success of the reforms.