EDMONTON (660 NEWS) – Despite an attempt to cap auto insurance rates, Alberta is facing some of the stiffest increases in the country.
That, despite an attempt by the outgoing NDP government to limit increases to 5 per cent.
— LowestRates.ca (@LowestRates_ca) April 23, 2019
CEO of Lowest Rates Justin Thouin says it’s a case of unintended consequences with many providers not making money under the new rules.
“Essentially what’s happened is by limiting the amount that insurance companies in Alberta can charge consumers for car insurance, they have driven a lot of car insurance companies out of the market.”
Thouin says many providers are backing away from Alberta because it’s no longer profitable. While that sounds counter-intuitive, Thouin says by eliminating the cap and allowing providers to charge more, consumers would pay less.
“Most insurance companies in Alberta don’t actually want to sell car insurance to Albertans because for the average consumer they’re actually losing money, they’re paying more money out on claims then they’re receiving back in premiums.”
The insurance industry is now urging the newly elected UCP government scrap the cap on premium hikes.