JSMedia – A five-member committee to review auto insurance has been formed by the province’s finance minister, but its recommendations are unlikely to bring rates down for Alberta consumers. The panel’s report, released Tuesday, shows that the average car owner will pay 9.4 per cent less in premiums in the next three years. While the recommendations are welcome, the government should not act on them immediately. The province’s official opposition critic, Jon Carson, says that the three-member review will simply be a Band-Aid.
The provincial government’s proposed changes to auto insurance are based on a recent survey of consumers. But some critics are doubtful about the new regulations, arguing that the government should not be intervening in consumers’ affairs. The new legislation should not affect the quality of service and coverage. In Alberta, there are already more than enough complaints about high rates. This is a red flag for many drivers.
The government is attempting to address the problems of high premiums by a new regulatory model for car insurance. This will make the insurance industry more competitive, and ultimately help consumers get lower rates.
Alberta Strikes Panel to Review Auto Insurance Won’t Bring Back Rates
The proposed changes will also increase the government’s revenue. The new plan, which was presented to the public on Thursday, would save Albertans $120 per year on their car insurance premiums.
The new auto insurance rates in Alberta have risen sharply over the last five years. After the NDP government implemented a five-per-year global rate cap, the UCP government failed to renew it. As a result, some drivers have reported seeing increases as high as 12 per cent. The cap on auto insurance was meant to protect insurers, but the new regime has removed this cap. However, the cap forced insurers to find cost-savings by affecting drivers.
The rise of Alberta auto insurance rates has been attributed to several factors. The government’s lack of interest in the auto insurance market in the province has prompted the rise in rates since the August 2017 election. The NDP government imposed a five-per-cent global rate cap to protect the consumer from excessively high premiums. But the UCP government did not renew the cap. As a result, some drivers have seen rates increase as high as twelve per cent.
The strike panels in Alberta have been criticized for recommending that premiums be frozen. That’s a sweeping statement that isn’t consistent with the truth. While the NDP is in favour of freezes, the Liberals aren’t willing to do so. The Alberta government wants the auto insurance market to remain competitive and fair. The federal government isn’t interested in any reforms.