Understanding the New Auto Insurance Rate Hikes in Alberta

Many drivers in Alberta were disappointed when they read on November 1st, 2013 that Calgary car insurance statements were going to look a little different upon renewal time. While there was notification prior to the increases, drivers were surprised at the Automobile Insurance Rate Board's (AIRB) decision to allow rates to rise as much as 5 per cent per company.

Why did the AIRB grant the rate increases?

These rate increases are the result of a number of factors including the rising amounts of claims, fraud, and expensive litigation that are affecting the industry. Initially, the insurance industry had requested permission to increase rates as much as 13 per cent to cover these expenses, but the AIRB brokered a compromise that reduced that number to just 5 per cent throughout the province.

What do these increases mean for drivers in Calgary?

Most safe drivers throughout the province are seeing a minimal impact on their rates. Conversely, insurance companies are raising rates on drivers who fit the following criteria:

• Points on their licenses
• Accidents
• A history of claims
• Prior convictions for drunk, careless, or aggressive driving

Effectively, if your record isn't absolutely spotless over the last year there is a better than fair chance that your rates will go up at renewal time.

Ways you can reduce your premiums now and in the future:

As with anything, there are ways you can counter these rate increases. By doing the following you can reduce the impact of these rate increases on your pocketbook:

• Increase your deductible
• Remain claims-free
• Drive safely and maintain a clean driving record
• Bundle your auto, home, and life insurance policies with the same insurance company
• Actively pursue multi-car and other discounts that may be available

The importance of safe driving and your insurance rates

Finally, it can't be understated that the reasons the AIRB agreed to this recent rate increase stems directly from the fact that drivers aren't being as careful as they once were. That's why it's important for you to adhere to the rules of the road and be a safe driver by doing the following:

• Obeying the posted speed limits along the roadway at all times
• Paying attention to road conditions and driving appropriately, especially during adverse weather conditions
• Using your signals and being a courteous driver
• Approaching intersections with caution and paying attention to your surroundings while driving
• Avoiding distractions such as cellphones
• Never eating or drinking while you are driving
• Never drinking alcohol then getting behind the wheel

Bow Valley Insurance has developed a network of car insurance companies and agents in the Calgary area that you can rely on. Before you renew your policy, be sure to contact us and discover the many insurance options and products that are available to you. If you are one of the drivers affected by these recent increases, we will be glad to help you navigate your way into a better, more cost effective policy.

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