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Legal costs to blame for high auto insurance in Alberta: Insurance Bureau of Canada

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For many years, Alberta has been among the priciest provinces in Canada when it comes to car insurance rates. This has continued to worsen over the last five years and a new report suggests that legal costs are largely to blame.

The Insurance Bureau of Canada commissioned a study by consulting firm MNP, which has found legal costs alone account for 20 per cent of the premiums drivers pay. This amounts to approximately $1.2 billion between 2018 and 2022, and legal costs have ballooned 31 per cent over that span.While legal costs are becoming a growing problem across the country, it is becoming a more significantly unique issue in Alberta.

"If you do sue, you end up paying out twice as much in legal fees versus how much you're getting in a cash settlement for a pain and suffering award. That doesn't make any sense," said Sutherland. Alberta Finance Minister Nate Horner speaks to the media in a file photo from June 2023. Horner has been tasked with reviewing rising insurance rates in the province.

 

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