How does car insurance work in Edmonton?
Just like all drivers in Canada, if you own a car in Edmonton, it’s required that you have car insurance. When it comes to getting car insurance in Edmonton, there is the option of both mandatory and optional coverage. Car insurance policies are operated by Alberta’s private car insurance companies.
It is your responsibility as a car owner in Edmonton to make sure you have the proper coverage required by your province.
Third-party liability: It is mandatory for all drivers in Alberta to have a minimum of $200,000 in third party liability insurance (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.
Accident Benefits: It is also mandatory to have accident benefits insurance. Regardless of who is at fault, this will 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.
Collision insurance: Collision insurance will cover damages to your vehicle following a collision.
Comprehensive insurance: Comprehensive insurance pays for loss or damage to your vehicle after an event such as theft, vandalism, or fire.
All perils: Where collision and comprehensive insurance meet. This offers protection if your car is damaged in a collision or by any other insurable risk.
Specified Perils: You can choose to add specific risks to your policy that you would like to be protected from. Specific risks will only be covered if written in your policy.
What factors determine car insurance rates in Edmonton?
There are several contributing factors that impact car insurance rates in Edmonton. They include, but are not limited to the following:
In Edmonton, it pays to have a clean record. Not only do you save yourself from having to pay any legal or medical bills associated with an accident but your insurance company will also reward you with a lower premium. Those who are involved in an at-fault accident will have higher premiums.
Young drivers will always be hit with higher premiums than drivers with years of experience, regardless of their driving skills. New drivers are considered to be of higher risk, facing higher premiums as a result. As long as you keep a clean record, your rates should start to decrease after you have around ten years of experience.
Your car insurance rates in Edmonton will depend on how much you use your car. For example, those who have a long daily commute or go on several road trips a year will likely have higher premiums than those who rarely use their car other than for their weekly errands.
Not only will your insurance rate vary based on the province and city you live in, your postal code will also play a role in determining your premium. This is related to the number of claims processed in your neighbourhood. If your neighborhood is known to have a lot of busy intersections or a high theft rate, you will be considered at high risk and can expect to have a higher premium.
In Edmonton, it is mandatory to have both a minimum of $200,000 in third party liability insurance and Accident Benefits insurance. If you choose to have additional coverage such as collision or comprehensive insurance, you will pay more.
- While you might pay more for additional coverage now, it can end up saving you from a major financial burden down the road should you be involved in an accident or have your car stolen. If your car is of little value, it might not be worth it to get extra coverage.
Why is car insurance in Edmonton so expensive?
On average, Edmonton drivers can expect to pay an annual rate of $2436.68 ($203/month). This is extremely high, 85% higher than the average cost in Alberta ($1,316). While there are so many factors that impact car insurance rates in Edmonton, there is not one single reason why Edmonton drivers face such high rates.
The following are all contributing factors to Edmonton’s high car insurance rates:
22% of Edmonton drivers have tickets on their driving record
Car insurance companies will penalize you for not having a clean driving record
30% of Edmonton drivers have accidents on their driving record
When you are involved in an at-fault accident, insurance companies will see you as high risk and as a result you will face higher premiums
High concentration of insurance claims
The more claims that an insurance company has to pay out to policyholders within an area, the higher the premiums will be for drivers in that same region
Population of just under one million
It’s normal for cities with a large population to also have high car insurance rates. Being Alberta’s second-largest city next to Calgary, this is expected
There are more cars than people in Edmonton: 981,361 registered vehicles and only 972,223 residents. The more cars on the road, the higher the risk of collisions, theft, and vandalism.
Priced according to Alberta’s Automobile Insurance Rate Board (AIRB) grid, car insurance in Edmonton is capped at a certain amount. This only refers to mandatory car insurance policies. When it comes to additional coverage, insurance companies can charge whatever they want. Insurers must charge either their own rate or the grid rate for basic coverage — whichever is lower.
If insurance companies wish to raise the rates, they can apply to the AIRB. While they couldn’t apply for more than a 5% increase in the past, in 2020, the cap was lifted and premiums for car insurance was increased by as much as 12% on average.
Keep in mind, each company is competing for your business and as a result will offer their own unique mix of prices, services, and types of coverage. It’s up to you to shop around and compare the different rates you’re given in order to find the best deal for you.
How cheap is insurance in Edmonton compared to other cities in Alberta?
When it comes to car insurance, Edmonton is the most expensive city in Alberta for various reasons. Rates in Edmonton are high, especially as Alberta is one of the most expensive provinces for car insurance. The highest rates for car insurance in Alberta can be found in:
- Edmonton – $1,237
- Rocky Mountain House
- Camrose – $1,120
- St. Albert – $1,139
- Calgary – $1,117