Alberta Car Insurance Laws, Grace Period & Other FAQs

That cost increase added insult to injury for Alberta’s drivers, who were already paying some of the highest insurance rates in Canada after a big increase in 2019.

Here's what we cover in this guide:

• How much is car insurance in Alberta?
• Alberta car insurance grace period for new car owners
• What do Alberta car insurance laws require?
• Is hail damage covered by car insurance in Alberta?
• Can someone else insure my car in Alberta?
• Who can drive my car under my insurance in Alberta?
• Can you insure a car in Alberta with a B.C. license?
• Can you register a car without insurance in Alberta?

First, a look at the Alberta government’s impact on today’s insurance rates and policies

According to LowestRates.ca, politics is at least partly to blame: In 2017, Alberta’s NDP government capped annual insurance rate increases at 5 per cent, prompting some insurers to leave the province’s marketplace rather than sell auto insurance policies at a loss. 

Then, Alberta’s United Conservative Party (UCP) ditched the cap after winning the 2019 election, and the auto insurance companies still operating in the province raised their rates significantly to stay profitable. 

And Alberta’s auto insurance story is still evolving: In April 2022, the provincial NDP – now the official opposition party – pitched a one-year rate freeze to help address the province’s high auto insurance premiums, a move the party claims would save drivers $360 million. 

While Alberta’s politicians try to find a way to make auto insurance more affordable, let us help with this guide to getting the coverage you need for your car or truck.

How much is car insurance in Alberta?

According to Insurance Bureau of Canada (IBC.ca) data published in 2020, the average Albertan paid $1,316 per year in auto insurance premiums, or about $110 per month. That was the third-highest amount in Canada, after B.C. ($1,832) and insurance in Ontario ($1,505).

Here’s a closer look at the average insurance Canadians pay across the country.

While Alberta’s auto insurance regime is private, not government-run, the provincial Automobile Insurance Rate Board (AIRB) regulates insurance rates using the Grid rating program. 

Base entry-level insurance premium for new drivers

The Grid sets a base entry-level insurance premium for new drivers, which is adjusted up or down in set increments based on a variety of factors. For instance, a new driver who has taken a driver training course qualifies for a 10 percent discount off the base premium. There are additional pre-set discounts for each year a driver maintains a clean record, but at-fault claims and other offenses trigger rate increases.

Your Alberta insurance premiums for third-party liability and accident benefits are set by the AIRB, and your insurance company sets the cost for direct compensation and property damage (DCPD), collision, comprehensive, and all perils/specific perils coverages.

If you’re wondering what it will cost you to insure a specific vehicle in Alberta, you can use the Alberta Automobile Insurance Rate Board’s (AIRB) Grid rate calculator tool for an estimate. Note that your actual premiums will be determined by your insurer.

Alberta car insurance grace period for new car owners

When you replace a vehicle, it is your responsibility to tell your insurer so that they can adjust your coverage and premiums accordingly. Ideally, you should do this right away, but most insurance companies allow a grace period to update your vehicle info. 

The exact amount of time varies from insurer to insurer, but it’s often about two weeks. If you fail to tell your insurer that you have changed vehicles and are involved in a collision after the grace period has expired, your claim may be denied, leaving you on the hook for all related expenses.

According to Edmonton’s Reliant Insurance, you should also promptly tell your insurer about any updates to your personal information that could affect your insurance coverage and premiums, such as moving to a new address or changes to your marital status. 

However, that grace period only applies if you already have an auto insurance policy on an existing vehicle. If you are buying your first car, or you buy a car after having cancelled a previous policy, you must get insurance for it before you drive it home, according to the Edmonton Community Legal Centre. 

What do Alberta car insurance laws require?

Alberta requires that you, as a vehicle owner, carry a basic level of auto insurance that covers accident benefits and third-party liability in the event of a crash. While Alberta’s auto insurance regime is private, the provincial AIRB sets a maximum amount that insurers can charge for that mandatory coverage.

Adding comprehensive and collision coverage to your policy in Alberta

You have the option of adding comprehensive and collision coverage to your policy. Collision coverage pays to fix damage to your vehicle that occurs as the result of any kind of crash, whether or not another vehicle was involved. 

If you want protection against the cost of replacing your car if it is stolen, or repairing damage caused by fire, falling or flying objects, or vandalism, you’ll need to add comprehensive coverage to your policy. However, because these coverages are not mandatory, the AIRB does not limit what insurers can charge for them.

Protection for not-at-fault drivers and ride-sharing services (Uber, Lyft)

On January 1, 2022, Alberta’s car insurance legislation was updated so not-at-fault drivers can have collision damage covered by their own insurance company. The government said this change aimed to make the repair process faster by eliminating the need to go after another driver’s insurer to pay for repairs.

Auto insurers in Alberta offer a variety of government-approved endorsements that let you add coverage for specific vehicle uses. Among them are the “carry passengers for compensation or hire” and “public passenger automobile enhanced coverage” endorsements, which your insurance broker may recommend adding to your policy if you drive for a ride-sharing service like Uber or Lyft. 

You can learn more about Alberta’s ride-sharing regulations here, and you’ll find info about all of Alberta’s approved endorsements at this link. (https://www.alberta.ca/automobile-insurance.aspx#endorsements)

5 other common Alberta car insurance questions answered:

1. Is hail damage covered by car insurance in Alberta?

According to Calgary-based brokerage Sharp Insurance, hail damage is covered under comprehensive insurance coverage, which is optional under Alberta’s auto insurance laws and covers any damage caused by falling/flying objects.

2. Can someone else insure my car in Alberta?

Yes, but it can be difficult to do if that person does not live with you.

According to RateLab.ca, the insurance company will want to know what the other person’s “insurable interest” is, or what’s at stake for them if they damage your vehicle. If they are not named on your vehicle’s title as a part-owner – a practice known as co-titling – insurance companies may be reluctant to insure them for fear of insurance fraud.

If you drive your personal vehicle for work, your personal insurance policy provides primary coverage if you are involved in a crash or are cited with a moving violation. However, you must tell your insurer that you drive your car for work. 

Non-owned car insurance

Your employer can purchase non-owned insurance to protect their business in the event that you are involved in a crash and the other driver sues the employer for their injuries or damage to their vehicle. 

You can read more about how Alberta’s auto insurance law views both of the above scenarios in the Alberta Superintendent of Insurance’s Non-Owned Automobile Policy.

Also, if an insured driver borrows your car because theirs is out of commission, their insurance may cover them while they use your car if they have added a non-owned vehicle endorsement to their policy. This way, if they are involved in a crash or get a ticket, your insurance coverage won’t be affected.

3. Who can drive my car under my insurance in Alberta?

Anyone with a valid driver’s licence can drive your vehicle as long as they have your permission and they’re not specifically listed as an excluded driver on your insurance policy.

According to this Alberta Insurance brokerage, anyone who lives at your address is automatically considered an occasional driver under your auto insurance, unless you choose to exclude them. You might do this if the person in question has been involved in an at-fault collision or has racked up multiple infractions that have caused your premiums to go up. 

Adding an occasional driver and excluding family members who live with you

If an excluded driver is caught using your car, they can be charged with driving without insurance. If they are involved in a collision, both you and they can be held personally responsible for damage or injuries caused by the incident.

If you regularly lend your car to someone who does not live with you, such as a friend who needs to run errands once a week, you must list them as an occasional driver on your policy.

Be careful about lending your car out: If the person borrowing it gets a ticket or is involved in a crash, your insurer may increase your premiums or, in the worst-case scenario, cancel your policy altogether.

4. Can you insure a car in Alberta with a B.C. license?

Yes, you can. If you move to Alberta from B.C. and bring a vehicle with you, the first step to registering your car in Alberta is to get it insured. You’ll need to get copies of your driver’s abstract and insurance and claims history from ICBC, the company that administers British Columbia’s provincial auto insurance regime. Once you’ve insured your car in Alberta, then you can register it with the Alberta government.

You can do all of this with a B.C. driver’s license, but you have to get an Alberta license within 90 days of moving to the province.

5. Can you register a car without insurance in Alberta?

No. You must show proof of insurance for the vehicle you want to register in your name, along with proof of ownership and an acceptable form of identification. If you bought a used vehicle outside of Alberta, you may also have to get it inspected before you can register it.