Changes to auto insurance in Alberta expected to impact premium calculations and claims process in 2022



Other mandatory changes will be made to auto insurance policies in Alberta in the new year.

As of January 1, the province will adopt a direct compensation model for property damage, more commonly known as DCPD.

For drivers not at fault in a collision, the DCPD will shift the burden of vehicle assessment and repair to its own insurance provider.

It is about speeding up a complicated, sometimes arduous process.

“It’s really just a process of streamlining how a claim is handled in the future,” said Jaime Tempeny of Westland Insurance. “So rather than chasing after carriers and third party adjusters, you are now dealing with the insurance company you hired.”

Alberta is the latest province to adhere to the model.


But many probably only focus on one thing when it comes to auto insurance: the price.

Aaron Sutherland of the Insurance Bureau of Canada says costs for most drivers will likely stay relatively constant.

“What happens to insurers as a result of this change must be revenue neutral, so there is no overall rate increase here,” he told CTV News. “(Suppliers) can now better align your premiums with your vehicle. So this means that if you drive a cheaper vehicle that costs less to repair, you will pay less under the DCPD. And at the same time, if you drive a more expensive vehicle that costs a little more to repair, you’re going to pay a little more. But it is a fair system.

According to the Alberta Automobile Insurance Rate Board, it is estimated that about 42 percent of Alberta drivers will see their premiums drop. 15 percent won’t notice a change and 43 percent of drivers will see increases.

Finance Minister Travis Toews declined a request for an interview, but sent a statement saying that under the DCPD, drivers can “expect more consistent handling and a faster response to complaints insurers “.

The changes will not affect the benefits drivers receive for physical recovery after a collision, nor the ability of Albertans to bring legal action after a collision.

DCPD does not cover damage caused by an uninsured vehicle.


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