Oct. 6, 2025 — Brokers in Alberta say the province’s decision to extend its cap on auto insurance rate hikes for good drivers could lead to reduced competition and unintended consequences for consumers.

The provincial government announced earlier this fall that it will extend a 7.5% cap on auto premium rate increases until the end of 2026.

Karim Mouait of Edmonton-based Cornerstone Insurance Brokers, who is also president of the Insurance Brokers Association of Alberta, said that while drivers with clean records will benefit from good-driver rates during the upcoming annual renewal period, shopping around is becoming increasingly difficult.

“For claims-free drivers renewing in 2025–26, they will still qualify for the good driver rates,” he told Thompson’s.

“However, options for changing providers and service will be restricted due to the heavy volume of longer placement times by all auto insurance carriers in Alberta.”

Mr. Mouait expects these challenges will intensify as long as the auto product remains unprofitable for insurers.

“Until there is proper rate adequacy under the cap environment, we will see further market option constraints,” he said.

The province’s brokers are seeing signs in several areas that availability is tightening.

“We are seeing premium surcharges on new business, removal of monthly payment plan options and removal of Section C coverage options (for collision and comprehensive coverage).”

He also suggested that cross-subsidy issues could potentially arise if the cap remains in place.

“It is a palpable concern that if the rate cap continues to be imposed, insurers will inevitably spread the cost to balance portfolio losses in other areas,” Mr. Mouait said.

“We may see a shift in rural drivers being charged more to subsidize urban drivers as historically this segment is charged less than urban drivers.”

Mr. Mouait said he expects insurers will raise conviction surcharges and remove accident forgiveness programs and that will erode incentives for safe driving.

“Currently, there are many Albertans who are unable to access affordable coverage and are driving without collision and comprehensive coverage,” he said.

“We expect to see continued expansion in coverage gaps across the province.”

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