How much would you pay to insure your vehicle? Would you pay $3,000, $4,000 even $5,000 per year? What about $7,000? For one Edmonton resident, that question isn’t rhetorical.
Wali Hassan, a 21 year-old Edmonton resident, recently fully insured a 2018 Honda Civic — he was required to do so per the terms of his financing agreement. After shopping around with four different providers, Hassan went with the cheapest option he could find: $7,080 per year with a $2,500 deductible.
"You would expect I’m driving a Lamborghini, but it’s a Honda Civic,” he told CBC News.
Unfortunately, Hassan’s situation isn’t unique. Many Albertans are facing higher rate premiums, especially drivers in Calgary. Heather Mack, a policy and communications advisor with the Automobile Insurance Rate Board (AIRB) says that they have “serious concerns about the health of the market right now,” she told CBC.
What is causing rate increases in Calgary and beyond?
In a recent market report, the AIRB outlined a number of factors that are causing insurance rate increases for Albertans, most notably Calgarians. Insurance providers across the province saw a loss ratio of over 97% in 2024, largely due to “skyrocketing bodily injury claim costs” and the catastrophic hailstorm in Calgary in August of last year, the report noted. In simple terms, this ratio means that for every $1 earned in premiums, Albertan insurers paid $0.97 in claims alone, not including staffing costs and other administrative fees.
According to the Insurance Bureau of Canada (IBC), last year was the most expensive for insurance companies for catastrophic weather events on record, as over $8.2 billion in insured damages were reported. Alberta alone saw half of this damage — $4.1 billion — which places pressure on Albertan insurance companies to raise their premiums, the organization noted.
The AIRB warned that as climate change continues to quicken in Canada, it sees more catastrophic weather events occurring in the province. For some Albertans in northern Calgary, the AIRB sees weather-related insurance coverage coming off the table entirely.
This raises an important question: What is the provincial government doing about these rising rates?
How the Alberta government is responding to the hostile market
As part of continuing insurance reform, such as rate pauses in 2023, the Alberta government is planning to move to a new no-fault insurance program known as “care-first” in 2027.
In short, the no-fault program aims to largely remove Albertans’ right to sue drivers for compensation, and instead increase driver benefits. Initially, the Alberta government projected cost savings of $400 per year on insurance premiums, but the province has stepped back from those claims, CBC News reported.
According to the government’s proposal, the driving force behind these cost savings for consumers is reducing the need for litigation, which drives up the cost of insurance premiums for residents.
In its annual report, the AIRB believes the change will have a “positive effect” for both insurers and consumers, though other experts such as personal injury lawyers have raised concerns, CBC noted.
What you can do to lower your insurance costs
These changes, if they go through, won’t be coming until 2027. In the meantime, here are some strategic ways you can lower your insurance costs right now, according to the AIRB:
- Don’t go with your first option. The AIRB recommends you get quotes from at least three different insurers to find a fair price. Rate formulas change greatly from insurer to insurer, so prices can vary largely from one policy to the next.
- Bundle your insurance. Combining your home and car insurance can lower your rates and make it easier to track your payments each month, or year.
- Install safety features on your vehicle. Installing safety devices, such as anti-theft devices, may lower your premiums as you pose less risk to an insurer.
Alberta’s vehicle insurance might be out of control in certain areas, but that doesn’t mean you can’t make strides toward lowering your costs right now. Using these tips above can put you in a good financial place to ride the wave of insurance uncertainty until 2027 comes around.
Sources
1. CBC News: $7,080 to insure a Honda Civic? Welcome to Alberta auto insurance in 2025, by Robson Fletcher (Aug 14, 2025)
2. Automobile Insurance Rate Board: 2025 Market and Trends
3. Insurance Bureau of Canada: Cost of historic Calgary hailstorm continues to rise (Feb 11, 2025)
4. Alberta: Automobile insurance reform
5. Automobile Insurance Rate Board: How To Save Money on Auto Insurance
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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