Auto premium rates to rise by five per cent

EDMONTON — Mandatory automobile insurance costs will increase by up to five per cent — an average of $30 extra per year — as of Nov. 1, the Automobile Insurance Rate Board announced in a news release Thursday.

Insurance companies have the option to implement all or part of the five-per-cent increase over the next three years.

Rate board chairman Alfred Savage said the board’s actuary and the insurance industry recommended a 13-per-cent increase, but the board opted for a “more measured approach.”

“We looked at claims cost, bodily injury and property damage and many others and the board decided that five per cent was a satisfactory level,” Savage said.

While bodily i njury claims have not increased, there has been an increase in claims for psychological and chronic pain, he said.

The decision applies only to mandatory coverage, which is required by law and includes third-party liability and accident benefits coverage.

It does not include optional collision or comprehensive coverage, which are set by individual insurance companies, the statement says.

Brian Mason, the leader of the New Democrat Party, said the increase is a “real concern.”

“This is the second year in a row that there’s been a five per cent increase. I don’t think the Automobile Insurance Rate Board has been nearly transparent enough with regard for the need for this.

While they’re saying there are increases in certain areas, they haven’t said what those increases are and what the additional costs are to the industry.”

Mason said public auto insurance is a “more cost effective” way to deliver insurance.

The Automobile Insurance Rate Board works to maintain the automobile insurance market with rates that are fair for both motorists and insurance companies.

The board reviews auto insurance rates yearly.

This is the second year in a row there’s been a five per cent increase BRIAN MASON NDP LEADER