Alberta, P.E.I. introduce car insurance cuts

Eighty per cent of Albertans will save money on car insurance premiums, the province's government promised Wednesday, releasing its reform package.

• INDEPTH: Insurance

The legislation is expected to save $250 million within the auto insurance system, which the government says will be passed along to Albertans through lower premiums.

"Once these reforms are in place, Albertans can be confident that they are paying fair auto insurance rates, and that what they're paying is in line with rates in other provinces," Finance Minister Pat Nelson said in a release.

"Our sole goal in this work has been to focus on the consumer, and the reform package reflects that commitment," she said.

The reforms are designed to make sure young drivers and seniors with good records aren't penalized, and to fairly compensate people who have been injured in an accident.

But the $4,000 cap on pain and suffering for minor strains and sprains is likely to continue to be contentious.

As well, insurance companies will be able to charge Edmonton drivers a higher rate than Calgary drivers for the next three years, because there are more claims in Edmonton.

"There's one thing for sure in politics, you can't please all the people all the time," Premier Ralph Klein said Tuesday.

"I think, by and large, it addresses what we wanted to achieve and that's bring about reasonable rates for those people who were being unduly penalized," he said.

There had been calls from the opposition parties to move to a public insurance system, saying the rates paid under public systems in Manitoba, Saskatchewan and B.C. are cheaper.

The recommendations approved by the finance committee Monday were the same ones it rejected three weeks before. Nelson said they had received clarification on the contentious issue of what defines a "minor" injury.

P.E.I. also tabled legislation this week aimed at lowering insurance rates by capping payouts for minor injuries at $2,500.

The province's attorney general said that should lower rates in the province by 13 per cent.