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Alberta Drivers Do Not Understand Their Auto Insurance Policies

A recent study has showed that drivers in Alberta do not understand their entire insurance policy details, and have admitted that a simpler online solution may be more acceptable. The consumers surveyed revealed that a way to provide more clarity on often complicated and long auto insurance policies.

American insurance provider Esurance conducted the study and revealed that consumers in Alberta believe having access to their insurance provider online could lead to better costs, more convenience, and ease of use.

"Alberta is an online-savvy province that is among the leaders in Canada in terms of internet usage," said Saskia Matheson, general manager at Esurance Canada. "As so many Albertans have already transitioned important services such as banking and shopping to online and mobile, it seems only natural that insurance would be next."

The survey also revealed that Albertans are already well versed in using the internet to shop for quotes, like the ShopInsuranceCanada instant quote tool that provides quotes from over 25 insurance providers in Alberta. However, those same consumers would like to have more access to their insurer after they have taken out a policy, in other words the front end of the industry is thriving online whereas the back end post-policy end is not. At least in the eyes of Albertans.

The result is that many drivers in the province do not fully understand their auto insurance policy in depth:

  • More than two-thirds admit to feeling in the dark about their auto insurance
  • Less than half feel they understand all aspects of their auto insurance policy
  • Nearly half have no idea how a driving infraction or accident would affect their rates

40 per cent of all consumers in Alberta conduct their auto insurance research online, using services such as ShopInsuranceCanada. They argue that is stands to reason that all aspects of the insurance process should also be available online, including more access to providers and policy details.

Alberta Auto Insurance Coverage

Alberta’s minimum car insurance requirements are very similar to Ontario’s requirements. The province of Alberta mandates the following types of car insurance coverage:

Third-Party Liability

  • This covers you if you’re at-fault in an accident and found legally responsible.
  • Your auto insurance company will cover legal costs in the case of a civil lawsuit, up to the limit of your policy.
  • In Alberta, the minimum level of coverage is $200,000, but it’s recommended you increase this limit to at least $1 million or $2 million due to the high costs associated with lawsuits.

Accident Benefits

  • This covers supplementary medical costs if you or anyone in your vehicle is injured in an accident.
  • For example: attendant care, income benefits for wage earners, funeral expenses, and death benefits.

Uninsured Motorists Coverage

  • This covers you if you’re involved in an accident with an uninsured motorist.
  • For example, if you’re involved in a hit-and-run, and the other driver doesn’t come forward, your auto insurance company will cover the costs of the accident.
  • Normally, the other person would be legally responsible to cover these costs.

Unlike Ontario car insurance requirements, direct compensation—property damage coverage is not required on your Alberta car insurance policy. This means that if you’re involved in a not-at-fault accident in Alberta, the other party’s auto insurance company is responsible for paying for the damages to your vehicle, unless it’s a hit-and-run or the other driver is uninsured.

Similarly to Ontario, there are optional levels of coverage on your car insurance policy in Alberta:

Collision Coverage

  • This covers the damage to your vehicle if you’re involved in an at-fault accident.
  • Third-party liability covers the damage to the other person’s vehicle, while collision covers your vehicle.

Comprehensive Coverage

  • This covers instances of vandalism, or extreme weather events that damage your vehicle.

Collision and comprehensive coverage require a deductible, which is the amount you’re responsible for in the event of a collision or comprehensive claim (the mandatory coverages do not require a deducible). For example, if a branch dents your vehicle during a windstorm, and your comprehensive deductible is $1,000, the auto insurance company will compensate you for anything after $1,000. If the damage to your car is $2,000, you pay the deductible ($1,000) and the auto insurance company pays the rest ($1,000).

Alberta Motor Association Highlights Cost of Bad Driving Record

The Alberta Motor Association warns motorists in the province that having a poor driving record can lead to higher auto insurance premiums. The non-profit AMA offers the advice to all motorists and not just its members, saying that bad driving can have wide reaching consequences ranging from financial restriction, license suspensions, prison, and even injury and death.

Poor driving habits can lead to accidents, which in turn cause damage to property and injury to first and third parties in a collision. The Alberta Motor Association also points out the individual cost as motorists with negative driving records pay more for insurance coverage on average. This evidence is well known as such drivers are considered to be high risk insurance consumers and these motorists can find it hard to get coverage and when they do are subject to some of the highest average auto insurance rates.

The AMA, which is affiliated with the Canadian Automobile Association (CAA), points to three specific types of bad driving that can lead to a poor record.

  • Traffic Safety Conviction: These may be considered minor traffic infractions and include such things as driving over the speed limit, failing to stop at a stop sign, or mildly dangerous driving. These infractions can lead to what are known as demerit points on a license. An accumulation of demerit points can lead to a license suspension and while insurance providers may overlook one traffic safety conviction, many of them will lead to higher premiums. Indeed the average higher rate for drivers with minor infractions is 25% more than the Alberta mean.
  • Serious Traffic Conviction: Similar to normal infractions, these are more serious if for example a driver is caught speeding in a public zone like outside a school. Other actions such as not stopping when prompted to do so by a police officer will also lead to this type of conviction. Insurers are not lenient even for first time offenders, with premiums 25% higher for one serious traffic conviction and up to 100% more for multiple offences.
  • Criminal Code Conviction: While the previous two are traffic infractions, a criminal code conviction is for drivers who actually break a law that is punishable by prosecution and even jail time. This includes driving under the influence (DUI) of alcohol or drugs, driving without a license, or getting involved in an accident under those terms. A criminal code conviction is catastrophic for premiums, with insurance companies hiking policy costs from 60% to 300% depending on frequency and severity of the crime.

Cheap Car Insurance Quotes

Whatever the type of Alberta car insurance coverage you’re looking for, our team of dedicated and impartial brokers will work with you to find you the best coverage and the cheapest car insurance rate. Fill out our instant quote form to compare quotes from up to 15 different Alberta auto insurance companies almost instantly.

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