An uninsurable environment

Auto insurance settlements in Alberta have surged 116% over the past 10 years, according to GISA data. As a result, Albertans now pay over three times more in insurance premiums due to collision-related legal fees and litigation compared to drivers in other provinces.

Moreover, legal and other monetary pressures have surged well above the current provincial rate cap, creating an untenable situation in the marketplace. With the cost of delivering auto insurance now well in excess of the price that insurers are able to charge in premiums, several insurers have been forced to withdraw from the province, while others have restricted the coverages they sell.

"There is no longer any debate. The Alberta government must move urgently to eliminate the rate cap and introduce changes to improve affordability for drivers," Sutherland said.

"Only meaningful action to address the cost pressures in the system, including legal costs, can achieve this. Alberta's insurers are keen to work with the government to make meaningful action a reality."

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The MNP report

In conjunction with GISA's findings, a separate report by professional services firm, MNP, found that in Alberta between 2018 and 2022:

  • The frequency of lawsuits following a collision increased 48%
  • Over $1.2 billion was spent on costs associated with litigation following a collision
  • When a claim is litigated, legal costs now vastly exceed – and are more than double – the amount provided in a cash payment for pain and suffering to those injured in a collision

As a result, additional data from MNP projected that drivers' premiums are to increase by 87.6% over the next decade under the province's auto insurance rate cap if reforms are not introduced and current trends remain the same during this period.

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Nicholas Sokic Contributor

Nicholas completed his master's in journalism and communications at Western University. Since then, he's worked as a reporter at the Financial Post, Healthing.ca, Sustainable Biz Canada and more. Aside from reporting, he also has experience in web production, social media management, photography and video production. His work can also be found in the Toronto Star, Yahoo Finance Canada, Electric Autonomy Canada and Exclaim among others.

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