What a mess CRAP, the Conservative’s Revolutionary Automobile Program is. Alberta’s government is trying to appease insurance companies that are fighting back over the rate cap by restricting the cap to a fortunate few. It has closed public consultations on a long-term fix for higher auto rates, and a reform proposal is expected to be introduced and implemented before the next provincial election in October 2027.
As per Canadian Underwriter magazine: Since the 3.7% rate cap does not do anything to reduce insurers’ claims costs, “the total increase in premiums needed to cover claim costs is unchanged and most of the increase is levied against those that do not qualify as good drivers,” MNP states. “This includes newcomers to Alberta, drivers who move within the province, drivers who make changes to their policies, and young drivers who are purchasing insurance for the first time. For these drivers, the increase in premiums could be substantially higher than the…cap on rate filings.”
We have two alternatives to CRAP.
· go back to the free enterprise society of thirty or so years ago, when insurers were allowed to insure the sector of the market that they had expertise in. This enabled them to provide service, make money and premiums appropriate to a specific sector. Hence you had insurers that chose the cream, those that chose the mid range and those that chose the nonstandard. Allowing for premiums to be appropriate for the risk without canning competition and free enterprise.
· Government Automobile Insurance.
As we know the free enterprise model was abolished by the Government of the time simply because an MP was upset because her young son was asked to pay a premium that was again appropriate to his experience and the risk involved.
Consequently, the infamous “grid” evolved and the viability and affordability of Alberta automobile has gone downhill ever since and the only people experiencing economic comfort are lawyers.
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