Auto Insurance Is a Disaster Under the UCP

Danielle Smith Will Increase Insurance Costs, Reduce Benefits

Albertans are suffering under an affordability crisis. Inflation is the highest in Canada, wage growth lowest, wages after inflation are shrinking, unemployment is the highest west of the Maritimes, home ownership for young people is drifting away. And to this crisis, Danielle Smith is adding yet another burden. She’s going to raise the cost of auto insurance.

Danielle Smith will increase the cost of auto insurance by at least 15%. That’s not a joke. That’s not spin. That’s her plan, communicated to Albertans by the Finance Minister. She’s proud of it.

In addition to the sticker shock, her plan for insurance will limit payouts for injuries, economic losses, and pain & suffering. And if you don’t like your insurance company’s judgement, you can’t sue in court for redress. It’s called “no-fault” insurance. And it’s terrible for victims.

It means Albertans will pay more to get less.

Insurance companies are profit-maximizing entities. Creating an incentive to collect premiums and reduce payouts could result in reduced payouts. That’s just how profit-maximizing works. Injured people might suffer.

If someone hurts you as a consequence of their behaviour—if they run a red light, blast through a crosswalk, fly through a school zone, text-while-driving—they should be required to make you right. This is a core legal principle that exists from before we were a country and before our system of democracy was invented. It’s an ancient right that we shouldn’t be taking away without a real conversation and a good reason.

Instead, Danielle Smith offers up insurance savings starting in 2027 that may or may not happen, after increasing premiums at least 15% between now and then, on top of increases this year, last year, and back to 2020. Albertans pay the second-highest auto insurance rates in Canada, and all Smith will do about it is increase your rates even more while reducing your benefits.

What can we do? Watch this space.