How does car insurance work in Calgary?
Just like in Alberta and all of Canada, if you own a car, it is mandatory that you have car insurance. Car insurance policies in Alberta operate on a three-tier system, consisting of both mandatory and optional coverages. It is your responsibility as a car owner in Calgary to make sure you have the proper coverage required by your province.
While these are the minimum requirements for drivers in Alberta, they only provide a thin layer of protection. 90% of drivers in Calgary will opt for additional coverage. This is where the third tier comes in.
It is required by law for all drivers in Alberta to have a minimum of $200,000 in third party liability insurance, also known as personal liability and property damage. This minimum coverage will take care of medical bills and repair costs for other drivers should you be involved in an at-fault car accident.
In Alberta, it is also mandatory to have accident benefits insurance. Regardless of who is at fault, these costs can cover anything from medical treatment, funeral expenses, death benefits, to salary replacement in the event you, one of your passengers, or a pedestrian is injured or killed in a car accident.
There is the option to opt for collision and/or comprehensive insurance. As the name states, Collision insurance will cover damages to your vehicle following a collision. Comprehensive insurance pays for loss or damage to your vehicle after an event such as theft, vandalism, or fire.
Many drivers in Calgary choose to have both collision and comprehensive insurance in order to be fully covered. Some may not choose to pay for additional coverage such as comprehensive insurance if the value of their vehicle is small. As a general rule of thumb, the more coverage you get, the more expensive your insurance policy will be.
What factors impact your car insurance rates in Calgary?
There are a number of factors that determine your car insurance rates in Calgary. Here’s are some to consider:
Your car insurance rates in Calgary will depend on how much you drive everyday. For example, someone who drives an hour to and from work everyday will pay more than someone who only uses their car to do small, local errands like going to the grocery store and picking up their kids from school.
While your insurance rates can vary based on your province and city, they can also vary based on your postal code. This is usually based on the concentration of claims in your area. If your area is known for having more processed claims than average, it is likely that you will experience a higher premium than someone in another area where concentration is low.
In Calgary, your insurance company will reward you for having a clean record. Those who are involved in an at-fault accident will face higher premiums as a result.
Whether you are an excellent driver or not, younger drivers will always have higher rates than a driver with years of experience. For the first 10 years or so after you get your license, you are considered to be an at risk driver, and as a result, will have a higher premium. Once you have years of experience your rates should decrease as long as you keep a clean record.
The cost of your car insurance will depend on the amount of coverage you require. In Calgary you are required to have a minimum of $200,000 in TPL as well as Accident Benefits. If you choose to have additional coverage such as collision or comprehensive insurance, you will pay more.
Why is Calgary car insurance so expensive?
There is not one single reason why calgary car insurance is so expensive. Just like any other large city, high car insurance rates are a result of busy roads, distracted driving, are high theft rates.
Calgary is Alberta’s largest city and also the fourth largest city in Canada. With over 1.5 million residents, you can expect there to be a lot of traffic on the roads, creating ample opportunities for collisions to occur. As a general rule, the more traffic on the roads, the greater risk, and the higher your car insurance premium will be.
It’s no secret that Canada has a distracted driving problem, including Calgary. In 2012, distracted driving convictions in Calgary skyrocketed (24,428 vs. 7,829 the previous year). This was attributed to the release of smartphones and drivers being on their phones while on the road.
According to the Calgary Police Commission, Calgary has the highest vehicle theft rate in Canada. In 2018, approximately 7000 vehicles were stolen, equating to 19 vehicles per day. This high risk translates into higher premiums.
Why are theft rates so high in Calgary? Unfortunately, many drivers leave their cars unattended in the winter months, creating easy opportunities for criminals. Regardless of the neighborhood you live in Calgary, you will be subject to this type of crime.
Where can I get the cheapest car insurance Calgary?
There is not a simple solution to this. Not one place in Calgary will give you the cheapest insurance. However, this doesn’t mean that you can’t find a low rate that is suitable for you.
There are so many factors that go into determining your premium (both in and out of your control), and as a result, it is crucial that you shop around and compare rates before making a decision. You may be surprised at the cheaper rates you find when you compare the market.
How much is the average insurance cost in Alberta?
Alberta is in the top three most expensive provinces, with an average cost of $1,316 per year. Ahead of Alberta is Ontario and British Columbia, with average annual costs of $1,505 and $1,832 respectively.
Keep in mind that these are simply averages and that your personal premium will be unique based on your driving profile.
Is Calgary car insurance regulated?
Car insurance in Calgary is operated within Alberta’s private insurance system. Unlike provinces like British Columbia where car insurance is regulated by the government, in Calgary you will purchase insurance from a private insurance company. With that being said, there is a government advisory board called the Alberta Automobile Insurance Rate Board (AIRB) that puts a cap on the amount of money private companies can charge for basic coverage.
The AIRB have implemented a grid rating system which allows Calgary drivers to see the maximum premium they will have to pay for their minimum policy. Beyond the basics, private insurance companies can charge whatever they want for optional, additional coverage. This is when it becomes essential to compare across different companies to get the best rate.