Alberta freezes auto insurance rates for the rest of 2023

The Alberta government will not approve auto insurance rate increases for the remainder of 2023.

Finance Minster Travis Toews and Affordability and UtilitiesMinister Matt Jones said in a news release Thursday the province will also look at short- and longer-term measures to get insurance rates in check.

Some rate increases will still go ahead if they were previously approved or if a driver incurs an at-fault claim or a ticket. Drivers can also see increases if they move to another address or insure a different vehicle.

The freeze only applies to private passenger vehicles, therelease said.

Toews told reporters that the pause will give government time to work with the insurance industry.

"They're committed to work with us as a government to to look for solutions to keep automobile insurance premiums as low as possible," he said.

"Again that's why this is simply a pause. This isn't a rate cap."

In a news release, the Insurance Bureau of Canada said it was disappointed by the province's decision.

"A rate freeze does nothing to improve the affordability of auto insurance in the near term and only pushes today's challenges down the road," the statement read.

"While premiums remain stable today, the government must undertake urgent reforms needed to truly address the costs that are putting pressure on the auto insurance system and on the premiums of Alberta drivers."

The move comes several years after the UCP government decided not to renew the five per cent rate cap implemented by the previous NDP government.

Thesecaveats prompted NDP finance critic Shannon Phillips to call the announcement a "fake freeze."

"The UCP lifted the rate cap brought in by our Alberta NDP government and insurance premiums skyrocketed," she said in a news release.

"Auto insurance rates went up as much as 30 per cent during the pandemic a time when Albertans were driving and working less and the UCP did nothing.

The pause on insurance increases reverses what Toews and the UCP government has insisted for years that rate caps don't work and only put a Band-aid on deeper problems.

In December 2019, the government announced the creation of a committee to look at the root causes of the increases.

The report was made public in October 2020. It recommended the province abandon its tort system of insurance and move to a private, no-fault model.

While the government took action on several smaller, short-term measures, Toews said at the time that the government would study the more transformative recommendations.

On Thursday, Toews said the document was "a good report by a very credible committee."

When asked if he would look back at the recommendations for solutions to today's situation, he said that "everything is on the table."

"We're going to be looking at every option right now to ensure that Albertans are getting best value from their insurance premiums and to ensure that we have a sustainable system in the long term."