The Alberta government plans to announce its insurance reforms this fall.
The cost of auto insurance has emerged in recent years as an issue for drivers and insurers alike.
It showed Alberta, on average, had both the second-highest premiums ($1,587) and claim size ($12,309) of any province, behind only Ontario.
And, while there are many options of how to address the situation, the government, insurers and motorists all largely agree that the current system is no longer working well.
Here’s a look at how we got here and what may come next.
How does insurance work now?
The government requires insurance to legally operate a vehicle in Alberta.
That insurance must cover accident benefits to anyone else in your vehicle should they be injured; third party liability for any injuries caused to another person; and direct compensation for property damage.
Claims are adjudicated on a fault-based system that divides those involved in to those who are deemed to be at fault, and those who are not.
Those who have been deemed to be not at fault can sue the at-fault driver, along with the accompanying insurance provider, for compensation.
Other insurance elements are optional, including coverage for damage after a collision where the policyholder is at fault, and comprehensive insurance to cover damage not resulting from a collision.
What’s wrong with that system?
Insurers have pointed to rising repair costs, legal fees, higher claim values and a rise in car theft as reasons for rising premiums.
What options might the province be considering?
No-Fault insurance
Under no-fault systems, claims are handled by a driver’s own insurance, regardless of who was deemed to be at-fault in a collision.
Such systems also may include some kind of limitation on litigation in an effort to reduce legal fees.
Proponents argue it is the simplest way to reduce premiums, while opponents argue the system robs people of their legal right to sue and in effect rewards bad drivers.
Hybrid system
Under this plan, drivers would retain the right to sue for serious injuries, with ICB claiming such a plan would save drivers up to $325 annually.
ICB says that plan would address much of the large legal costs that it says have driven up premiums.
Public insurer
One option that is less likely to emerge is the move to a public auto insurer as seen in B.C., Saskatchewan, and Manitoba.
The government-commissioned reports showed this model would cut premiums in Alberta by an average of $732 a year.
Such systems have also been criticized for potentially passing on insurance costs to non-drivers.
What does the public say?
Beyond the expected continued anxiety over high premiums, we don’t yet know if a public consensus has developed on which of the above systems is preferable.
The survey focused on five themes — affordability, stability, simplicity, care-focused, and accountability.
The province has pledged to make the results of that survey public once changes to the system are announced.
What happens next?
The province says it’s reviewing the results of that survey as well as consulting with insurers.
The finance ministry expects to announce the reforms it settles on in the fall of this year.