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Understanding Alberta Auto Insurance Grid Rates

October 18, 2023

If you’ve ever obtained a quote for auto insurance, you may have come across the term “grid rates.” While it may seem unfamiliar to many, understanding grid rates is important. It ensures you’re getting the best possible price for your auto insurance coverage.

What Are Auto Insurance Grid Rates? Grid rates refer to the government-regulated maximum prices that insurance companies can charge for basic insurance, specifically third-party liability coverage. These rates are applicable in Alberta and act as a benchmark for insurers when setting their premiums.

Determining Auto Insurance Grid Rates: When licensed as a driver in Alberta, your initial grid rate starts at zero, provided you didn’t have any at-fault claims during your learner’s permit phase. However, each at-fault accident with property damage or bodily injury results in an increase of five points in your grid rate. On the flip side, every consecutive year without any accidents leads to a decrease of one point in your grid rating, subsequently lowering your insurance premium.

Benefits of Driver’s Training: For new drivers, completing an accredited driver’s training program and passing both the in-class and road safety portions can help lower your grid rate by two points. This reduction in the grid rating translates to a reduced premium. However, it’s important to note that if you already have an at-fault claim, driver’s training cannot lower your grid rate.

Exceptions to Lowering Grid Rate: Unfortunately, if you’re a new driver with an at-fault accident within your first two years after taking driver’s training, your grid rate will only increase to a maximum of three, instead of four or five, depending on your driving experience.

Considerations Beyond Grid Rates: While grid rates set the maximum price for liability insurance, they may not always offer the best price. Insurance companies have their own rating methods based on risk assessment, which can result in premiums lower than the grid rates. Factors such as at-fault claims, license suspensions, minor convictions, major convictions, and criminal code convictions also impact your auto insurance premiums.

Other Factors Affecting Premiums: Aside from grid rates and conviction records, other factors that influence your liability premiums include your location within the province and the amount of liability coverage you choose. Living in major cities like Edmonton or Calgary typically increases the likelihood of accidents and, consequently, higher premiums. Additionally, it is recommended to have at least $1 million in liability coverage, considering the rising number of claims exceeding the legal minimum of $200,000.

Understanding auto insurance grid rates is pivotal in ensuring you secure the best price for your coverage needs. It’s important to remember that grid rates serve as a maximum price, while insurance companies have flexibility in offering lower rates based on their risk assessment. If you need assistance navigating the complex world of auto insurance or obtaining a free quote, our team at Ing & McKee Insurance is here to help.



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