How car insurance works in Edmonton
Car insurance protects the driver of a car, its passengers, and bystanders from financial losses caused by car accidents. Car insurance is the same in Edmonton as it is in other Alberta cities. A car needs to be insured before you can drive it in Alberta. Car insurance is also tied to the vehicle, meaning that if you replace your current vehicle with another one, you’ll have to update your policy to reflect that you have a new car that has its own risk profile.
The cost of your premium is influenced by the make and model of the car, as well as your driving and insurance histories.
The province has outlined the minimum amount of insurance (medical, physical damage, and liability insurance) you need to buy, but you can increase your coverage with optional coverages. (We’ll dive further into this in the section below.) Driving without the minimum coverage will result in large fines and difficulty buying insurance in the future.
The experience of buying insurance is the same across the province: you can buy insurance from insurance agents, brokers, or rates comparison sites like LowestRates.ca.
Private vs. public car insurance insurance
In some provinces, drivers acquire insurance from a government corporation. This is the case in B.C., Manitoba, and Saskatchewan. Elsewhere, drivers buy insurance from private companies (think big brands like Aviva or Intact Insurance). Private companies provide car insurance in Alberta.
Edmonton's car insurance system
In addition to who provides car insurance, how car insurance claims are settled is also different in Alberta. There are two main approaches in Canada: the no-fault approach and the tort approach.
Under a no-fault system, you only deal with your own insurance company, never a third party’s. Your insurance company will do that on your behalf. Your insurer pays for damage to your property as well as your medical care.
In a pure no-fault system, you cannot sue for damages in excess of your policy. If you expect that your bills will be high following an accident, you need to buy extra insurance in advance to bridge the gap.
Under a tort system, you can sue the other driver’s insurance company for compensation for medical expenses for amounts that far exceed your policy’s limit. You can also sue for things like pain and suffering (not an option in a pure no-fault system).
Alberta has a hybrid system for resolving claims, meaning it has elements of a tort system and a no-fault one.
An example of a no-fault benefit included in Alberta’s mandatory coverage is direct compensation property damage (DCPD), which was introduced in 2022.
DCPD ensures that your insurance company pays to repair your car if you were not responsible for the accident.
An example of a tort benefit that Albertans can access is that drivers can sue for pain and suffering and for economic losses that exceed their policy’s limit.
Price controls for auto insurance in Edmonton
The Alberta government has a hand in controlling the price of auto insurance.
This is done through the Alberta Insurance Rate Board (AIRB). Before an insurer can change their prices, they have to submit it to the AIRB for review. The insurer must also provide justification for the change.
The AIRB also has a say over the criteria an insurer can use to rate customers, which determine how much a person will pay and even whether they will be accepted as a customer at all.
Each insurer differs in their underwriting standards, but broadly speaking, companies assign different ratings to drivers based on their insurance and licensing histories, driving record, address, and vehicle type.
The AIRB grid rating system is another feature unique to Alberta’s auto insurance regulatory regime.
The grid establishes a baseline rate that can be offered to entry-level drivers as well as the maximum amount an insurance company can charge for basic coverage. Insurers must compare the rate they want to charge against the grid and choose the lesser amount.
Insurers usually only defer to the grid rate when they are dealing with inexperienced drivers (less than eight years of experience). Grid-rated drivers make up less than 10% of the driving population.
If you are a grid-rated driver, then each year without a claim against your third-party liability coverage lowers your rate by 5% on the grid, up to a maximum of a 60% reduction, which will put you at the base rase, or entry level premium. Each at-fault claim moves you up five steps on the grid, however.
Mandatory car insurance coverage for Edmonton drivers
A standard Alberta auto insurance policy includes the following coverage:
Third-party liability: If you are responsible for an accident, this covers your legal costs. In Alberta, you must carry $200,000 in liability insurance, but you can increase your benefit up to $2 million.
Direct compensation property damage (DCPD): Covers the cost of repairing or replacing your vehicle if you are not at-fault for causing an accident.
Accident benefits: Covers medical expenses not paid for by Medicare (up to $50,000 but you can increase this benefit at extra cost), some funeral expenses, and provides income replacement in instances of disability.
Optional car insurance coverage for Edmonton drivers
For an additional cost, you can enhance a standard policy by adding these optional coverages for. These coverages can be added at the time of purchase, mid-term, or at renewal.
Collision: Provides compensation to repair or replace your car when it’s damaged by an accident that you caused.
Comprehensive: Compensation for when your car is damaged by something other than a vehicle collision. For example, a falling tree, hail, vandalism, or theft.
All-perils: Combines collision and comprehensive coverage
Specified perils: Provides coverage for insurable perils that you specify and only against those you specify; the opposite of broad coverage. Think of it like a la carte insurance.
An insurance endorsement (also known as a ‘rider’) is a type of optional coverage, but it amends the terms of the standard policy (it overrides whatever the original policy says). Endorsements can be used to add or remove coverage. An endorsement can also be added at the time of purchase, mid-term, or at renewal. Here are some of the endorsements available to Alberta drivers.
Comprehensive Cover Limited Glass (SEF 13D): Reduces or removes coverage for glass repair from your base policy for a lower premium.
Loss of Use (SEF 20): Provides compensation for alternative transportation (taxis or public transit), up to a limit, when your car is undriveable due to an insured peril.
Legal Liability for Damage to Non-Owned Automobiles (SEF 27): The coverage you have against physical damage in your base policy is extended to rental cars.
Accident Rating Waiver (SEF 39): Ensures your premium won’t increase after your first at-fault accident.
Limited Waiver of Depreciation (SEF 43R): Prevents the insurer from factoring in your car’s depreciated value when calculating your claim settlement.
Family Protection (SEF 44): If you’re hit by an underinsured driver (or by a hit-and-run driver), it’s likely that the other driver’s insurance benefits will not be enough to cover your expenses. This endorsement will bridge the gap.
How much does car insurance cost in Edmonton, on average?
As of early 2020, the average car insurance quote in Edmonton was about 85% higher than the Alberta average of $1,316. Edmonton has the highest average car insurance rate of all the major cities in Alberta.
Edmonton car insurance rates by postal code
The Edmonton postal code with the highest average car insurance premium is the T6T region.
The neighbourhoods of Laurel, Silver Berry, Wild Rose, Larkspur, and Maple are contained within this postal code.
Its boundaries are Whitemud Drive NW to the north, 34th, and 32nd Streets NW to the east, 15th Avenue NW to the south, and 17th Street and Anthony Henday Drive to the east.
Residents in the T6T postal code pay on average 13% more than the Edmonton average, which is already the highest in the province.
The Edmonton postal code with the lowest average car insurance premium is the T6C region.
The neighbourhood of Bonnie Doon, Strathearn, Holyrood, Idylwylde, and Cloverdale are contained within the postal code.
Its boundaries are 98 Ave. NW in the north, in the east it follows the path of Mill Creek and continues on to 97 St. NE, rejoining with Mill Creek again in the south, and is closed off in the west by 75th St. NW.
Residents in the T6C postal code pay about 18% less than the Edmonton average for car insurance.
Factors that determine car insurance rates in Edmonton
The way insurance companies price car insurance premiums is incredibly complex. Before giving you an estimate, Edmonton car insurance providers will look at several factors:
Your age: Young drivers pay the highest car insurance rates. It’s the same thing in every province. Insurance prices tend to drop off after age 25 and continue to fall through to age 30. This is why cheap car insurance for new drivers in Edmonton, along with other Canadian cities, can be hard to find (Learn more about shopping for car insurance for students in Edmonton.)
This isn’t the only way your age can impact your car insurance. Adults between the ages of 50 and 70 get some of the lowest car insurance rates in Toronto. If you belong to this demographic, you probably have a long history of being insured and you might even have bundled your home insurance policy with the same provider of your auto insurance.
After age 70, though, you might see your rate begin to creep up because people in your age group are more statistically more likely to need to file a claim and need longer to recover from an injury. Therefore, car insurance rates for seniors in Edmonton, and other Canadian cities, can also be more expensive.
Your driving history: Insurers like to see a lot of driving experience (typically eight years or so). They reward long-time drivers who are conviction and claims-free with lower rates. This factor also makes it harder for new drivers in Edmonton who need car insurance to find affordable rates. In addition, if you’ve been deemed a high-risk driver and you need car insurance in Edmonton, your driving history may become an obstacle to obtaining a cheaper rate. Click here to learn more about high-risk car insurance quotes for Edmonton drivers
Your driving history: Insurers like to see a lot of driving experience (typically eight years or so). They reward long-time drivers who are conviction and claims-free with lower rates. This factor also makes it harder for new drivers in Edmonton who need car insurance to find affordable rates. In addition, if you’ve been deemed a high-risk driver and you need car insurance in Edmonton, your driving history may become an obstacle to obtaining a cheaper rate. Click here to learn more about high-risk car insurance quotes for Edmonton drivers
Your postal code: Insurance companies also rely on postal code regions to price auto insurance. Some postal code regions pay more in insurance than others because customers within that region are more likely to file a claim. That includes situations such as theft, vandalism, and collisions.
Your mileage: Insurance companies will ask you how many kilometers you drive each day. The longer your commute, the more time you spend on the road, which increases the probability that you’ll be involved in an accident.
Your car: Insurance companies have figured out a way to judge which car model is more likely to be involved in a collision, regardless of driver behaviour.
We can help you find cheap car insurance quotes in Edmonton.
Edmonton drivers pay some of the highest prices for car insurance compared to other large Alberta cities.
Luckily, you can find a cheaper rate. Comparing the auto insurance quotes from multiple insurance companies will help you find savings.
Just enter your postal code and hit the pink button at the top of the screen to get started.
Not ready to compare car insurance quotes yet? Read on to learn more about shopping for cheap auto insurance quotes in Edmonton.
How Edmonton car insurance premiums compare to other cities in Alberta
We’ve ranked the top six cities with the highest car insurance rates in Alberta and benchmarked the average price in those other cities with Edmonton’s to see how they compare. The result? Edmonton beats out all other Alberta cities — and not in a good way.
- Edmonton
- Calgary (5% lower)
- Fort McMurray (15% lower)
- Red Deer (23% lower)
- Lethbridge (23% lower)
- Airdrie (26% lower)
Drivers in Edmonton pay 85% more than the average cost of the auto insurance premium in Alberta, which is $1,316 according to the Insurance Bureau of Canada.
We don't know exactly why automobile insurance in Edmonton is so much higher than the provincial average. However, we see that a high percentage of our Edmonton users have tickets and accidents on their driving record: 22% and 20% respectively. The main driver of rising prices are claims.
The more frequently an insurance company pays out claims to policyholders within the same region, the more car insurance premiums will go up for all the drivers in that area.
And in general, larger cities also tend to have higher auto insurance premiums. With just under a million people, Edmonton has a population that’s comparable to Calgary, the province’s largest city. Plus, there are slightly more cars than people in Edmonton: 981,361 registered vehicles and only 972,223 residents. It works out to a ratio of 1:1.
Numbers like that support the insurance industry’s view that collisions, theft, and vandalism are all more likely in major cities. Car insurance prices for Edmonton drivers are also going to rise even more.
Auto insurance in Edmonton is also priced according to the Automobile Insurance Rate Board (AIRB) grid, which enforces caps on the maximum amounts that auto insurance companies can charge drivers for basic auto insurance policies. Insurers must charge either their own rate or the grid rate for basic coverage — whichever is lower.
Insurance companies can apply to the Board to raise rates, and in the past, they couldn’t apply for more than a 5% increase. In 2020, that cap was lifted and auto insurance providers promptly raised premiums by as much as 12% on average.
