Brokers Association Raises Concern Over Alberta Auto Insurance Market

Drivers are increasingly unable to secure coverage due to rate cap, promise of reform appearing to stall: Insurance Brokers Association of Alberta

New York, NY (July 31, 2025) – The Insurance Brokers Association of Alberta (IBAA) is raising concerns, as more and more Alberta drivers are unable to secure the coverage they need in the province. With the rate cap now in its third year, auto insurers have increasingly scaled back or terminated coverages, making it difficult for many drivers to secure the insurance they need. This leaves them dangerously underinsured and forced to pay out-of-pocket when an accident occurs.

“An insurance broker is a driver’s best resource to secure the best coverage at the best possible price. Unfortunately, as auto insurers reduce available coverages or withdraw from the Alberta market due to the rate cap, brokers are increasingly unable to find coverage options that are both accessible and affordable for many drivers in the province,” said Jhnel Weller-Hannaway, Chief Executive Officer of IBAA. “Though the intention of the rate cap is to ease the cost burden for good drivers, the system isn’t working, and the province must immediately remove this policy so the competitive market can return to health ahead of reforms.”

IBAA members are seeing first-hand the damage that has been caused to drivers and the auto insurance market in the province due to the rate cap. As insurers curtail the level of coverage they offer, it’s become increasingly difficult for many drivers to secure or even afford the insurance they need, such as:

• Owner lease vehicles, who are increasingly unable to secure the collision and comprehensive coverages required in their lease contracts;
• Drivers whose insurer have left the province and must find a new carrier; and,
• Drivers with a history of claims or road-side infractions.

With limitations on availability of required coverages, the IBAA is concerned that the rate cap will lead to increased premiums as insurers attempt to recover inevitable losses. Simply put, brokers are grappling to secure proper coverage for clients as insurers scale back or leave the province due to the rate cap. With Albertans currently paying the second highest premiums in Canada, we will eventually see an increase in the number of drivers without proper insurance coverage.

While government is working to reform Alberta’s auto insurance system and introduced a Care-First model, those efforts face significant challenges in delivering improved affordability due to the rate cap and growing cost pressure. In light of the fact that costly court access remains a feature under the new system, IBAA is concerned that Alberta will end up having the most expensive care-based model of any jurisdiction in Canada.

“There is still time for the government to succeed in its goal to build a better, more affordable system,” said Weller-Hannaway. “We implore the government to lift the rate cap so that competition and choice can return to the market. We strongly recommend adoption of reforms that focus on care, while improving premiums cost and accessibility for consumers whether or not they are involved in collisions.”

About the Insurance Brokers Association of Alberta 

Insurance Brokers Association of Alberta (IBAA) is a not-for-profit trade association that represents more than 5300 insurance brokers in Alberta and over 320 individual brokerages in over 550 offices in approximately 167 communities in Alberta.. For more information, visit ibaa.ca.

SOURCE: Insurance Brokers Association of Alberta