Alberta seesaw - rates/cap

The cap is back and here to stay!
Here we go again! Alberta’s minor injury cap question is back. This time it has been the decision of the Supreme Court of Canada not to re-open the issue. This is the "final answer".

The original cap challenge accident victims had filed leave to appeal the Alberta Court of Appeal’s decision upholding the $4,504 cap. The Supreme Court decided to deny any further review of the issue.

The cap continues without concern of court overturn.

*July 30, 2009 *
The Alberta Insurance Rate Board (AIRB) has ruled that the 5% decrease in the public liability and property damage (PLPD) is in order and will take affect in November of this year. This mandatory liability coverage is advantageous to all drivers.

This has decrease nothing to do with the physical damage rating for collision and upset. This will still be affected by the experience rating applied by the underwriting process. This has nothing to do with the comprehensive or specified perils portion of the premiums charged. These rates have increased or will increase once applications are approved by the Superintendent of Insurance.

Some insurers may choose to further decrease rates on their PLPD. It is likely that this will be more for a select group of claims-free, experienced drivers. Rate changes should be announced prior to November.

The Alberta Court of Appeal ruled and has upheld the validity of the injury cap.

The ruling from the Provincial Court of Appeal determined that the cap is constitutional. It is expected that the next step will be taking it to the Supreme Court of Canada where a panel of Justices determine if they will hear the case. This will happen in mid-September.

It was reported that Alberta's Auto Insurers are backing off on a 40% rate increase and instead were looking for between 7-8%. There have been rate increases by some companies last November and again this April that affected the collision and comprehensive premiums.

Hearings were held June 16th and 17th to discuss the matter of rate increase, with a decision having to be made by August 1st. The rate board considers premiums for the basic coverage required in Alberta, not the collision and comprehensive premiums. It is not unusual to see the collision premium for your vehicle exceed the basic premium.

At the meetings it was discussed that there is an option of rates going down for next year. Ted Zubulake, a consultant hired by the province's review board stated that a a 3% decrease would be more appropriate. This reduction for the basic PLPD (liability) premium going down by 3% effective November 1st.

As the situation develops, Turner's Tips will keep you informed. For further information on the recent court case on the cap, click here.