Fairness Rules Every Insurer Must Follow
Insurers in Alberta must get approval from the Automobile Insurance Rate Board (AIRB), before implementation. AIRB checks each insurer’s pricing against 5 simple rules:
- Prices must be based on evidence. No guessing.
- Prices must be fair between drivers. Differences must come from cost and risk. They can’t come from discriminatory factors like your income or how much you’re willing to pay.
- Insurers can’t make excessive profit. Insurers can include a 6% return-on-premium in their rate application. The AIRB also reviews insurer profit through the Excess Profit Review to ensure Albertans are not being overcharged.
- Traffic convictions and at-fault claims can only be used for a set period of time. At-fault claims stop affecting your car insurance cost after 6 years. Tickets (minor or major) stop after 3 years. Criminal Code convictions stop after 4 years.
- Your insurer must explain why your premium changes.
You can find more information in AIRB’s Technical Guidance, effective December 15, 2025.
How Are Car Insurance Rates Set in Alberta?
Every insurer uses a rating program. It’s a set of rules for turning facts about you into a price. The facts can include your vehicle, your driving record and where you live.
In Alberta, insurers must have their car insurance rating programs approved by AIRB before they use them. AIRB is Alberta’s independent auto insurance rate regulator. It doesn’t sell insurance. Its job is to review rates and help Albertans understand them.
To keep pricing fair, AIRB uses the below principles. Think of them as ground rules.
Rule 1: Is Car Insurance Pricing Based on Evidence?
Yes. An insurer needs real data to support how it prices things.
AIRB says the evidence must be objective, verifiable and available. It must be strong enough to predict how much claims will cost. In plain words: an insurer can’t set a price on a hunch.
Rule 2: Are Prices Fair Between Drivers?
They must be. Two drivers can pay different prices only when their risk and the cost of covering it, is different.
Insurers can’t charge different prices based on:
- Demand
- How much you’re willing to pay
- Your income
Example: If one area has more or costlier claims than another, prices can differ between those areas. This difference must come from actual claims costs.
AIRB’s guidance also says some things can’t be used to set rates. These include credit score, income and net worth and existing medical coverage.
Rule 3: Can Insurers Make Excessive Profit?
No. AIRB’s rules say an insurer’s pricing shouldn’t provide excessive returns.
The rule works both ways. It protects you from unfair prices. It also recognizes the insurers need to stay financially sound so they can pay your claim when you need it.
Rule 4: How Long Do Tickets and Claims Affect My Car Insurance Cost?
Changes to car insurance rates must be reasonable. When an insurer puts more weight on your driving history, the effect must be time-limited.
| What’s on your record | Stops affecting your premium after |
| At-fault accident or claim | 6 years |
| Minor or major traffic ticket (conviction) | 3 years |
| Criminal Code conviction | 4 years |
What’s the Difference Between a Minor and a Major Conviction?
A conviction is a traffic ticket you’ve been found guilty of or paid. AIRB sorts them into minor, major and Criminal Code groups. Here are some examples from AIRB’s guidance.
Minor convictions include:
- Speeding up to 50 km/h over the limit (grouped into three steps)
- Following too close
- Passing a vehicle stopped at a crosswalk
- Speeding for an unreasonable rate of speed
Major convictions include:
- Speeding more than 50 km/h over the limit
- Any speeding in a school or playground zone
- Careless driving
- Racing
- Failing to stop for a school bus
- Distracted driving, such as using a cellphone
- Leaving the scene of an accident
Good to know: Speeding in a school or playground zone is always major, even if the same speed would be minor somewhere else. The full lists are in AIRB’s Technical Guidance.
Will I Be Told Before My Premium Changes?
You should be. The AIRB requires insurers give clear communication about premium changes. They must give simple, adequate and effective notice to consumers, agents and brokers. This way, you can make an informed choice about your auto insurance coverage.
How Much Should I Pay for Car Insurance?
AIRB can’t tell you the right price for your situation. Your car insurance cost depends on your own details and on each insurer’s approved rating program. What AIRB’s rules do is make sure the way prices are set is evidence-based, fair and open.
These rules don’t mean prices never go up. They set the guardrails for how car insurance rates are set and changed.
Where Can I Compare Car Insurance Rates in Alberta?
Prices can differ from one insurer to the next, so it pays to look around. At airbfordrivers.ca, you can:
- Compare rates between insurers based on standard profiles
- Browse the Insurance Company Directory
- See premiums by postal code
- Look up approved rate changes
Visit airbfordrivers.ca to know more.
Frequently Asked Questions
How is car insurance calculated in Alberta? Each insurer uses an approved rating program which turns facts about you into a price. The facts can include your vehicle, your driving record and where you live. AIRB reviews these programs against fairness rules: evidence-based, fair between drivers, no excessive profit, reasonable and time-limited changes and clear communication.
Who sets car insurance rates in Alberta? Insurers propose their own rate changes. They must have their rating programs approved by the Automobile Insurance Rate Board (AIRB) first.
Can my insurer charge me more because of my income? No. Insurers can’t charge different prices based on demand, willingness to pay, or income.
How long does an at-fault claim affect my premium? It can’t have an impact after 6 years.
How long do traffic tickets affect my car insurance cost? Minor or major convictions can’t have an impact after 3 years. Criminal Code convictions can’t after 4 years.
What is the difference between a minor and a major conviction? Examples of minor convictions are speeding up to 50 km/h over the limit and following too close. Examples of major convictions are speeding more than 50 km/h over, any speeding in a school or playground zone, careless driving, racing and distracted driving.
What is the eligibility for the Good Driver Rate Cap in Alberta? At renewal, to be eligible, a driver has no at-fault claims in the last 6 years, no driving-related Criminal Code convictions in the last 4 years, no major convictions in the last 3 years and no minor convictions in the last 3 years. There are also some technical exceptions like switching vehicles, moving, or adding a higher-risk driver to your policy. For the full details visit https://www.airbfordrivers.ca/good-driver-protection/
Will my insurer tell me before my premium changes? Insurers are expected to give simple, adequate and effective notice of upcoming premium changes.
Can AIRB say no to a rate change? AIRB won’t approve a rate change greater than what the Board finds reasonable.
Where can I compare car insurance rates in Alberta? Visit airbfordrivers.ca to compare rates on standard profiles, browse the Insurance Company Directory and look up approved rate changes