EDMONTON — Alberta’s insurance rate board says it will allow companies to hike automobile insurance rates by five per cent.
The Automobile Insurance Rate Board says insurance companies have the option to implement all or part of the increase over the next three years.
The rate hike, which applies only to the mandatory part of coverage, is effective Nov. 1.
The board says a boost in injury frequency and property damage collisions, combined with a drop in revenue generated by investments made on premium income, were the key factors behind it allowing the increase.
Board chairman Alfred Savage says the increase works out to an average hike of $30 per year.
“We knew that an increase would be necessary, but we wanted to take a more measured approach in order to maintain balance in the system,” Savage said in a release.
The board says this is the first increase since 2008.
NDP MLA David Eggen said Thursday that an increase to mandatory insurance rates in Alberta will be costly for Alberta families.
“These insurance companies have been losing in the stock market, and I don’t understand why Albertans should foot the bill for this,” Eggen said in a news release.
“Insurance rates in Alberta are already among the highest in the country, and now we’re expecting them to increase for the next couple of years.”
In many provinces, provincial governments are responsible for automobile insurance, in order to ensure affordable insurance rates for drivers. The NDP says both Saskatchewan and Manitoba, which have a government insurance agency, have substantially cheaper insurance rates.
The NDP believes that Albertans would be better served by a provincial insurance plan that would regulate costs and save money for drivers.