If you live in Alberta, the insurance rate grid system might be a known concept. You might find your neighbour paying lower insurance rates than you on their car. Various factors can help determine your car insurance rates. Of course, these also fall under the grid rating program.
But, what is a good grid level for insurance?
If you are looking for affordable insurance rates for your car, well-known companies such as Surex can help you out. But before that, it is best to learn about the auto insurance grid levels in Alberta.
A Brief History
Alberta’s grid rating program has been around since October 2004. It was created to set and pin down a maximum price limit on Alberta insurance premium rates. The Automobile Insurance Rate Board (AIRB) says that 94% of those insured pay less than the specified grid level, while 6% pay proper grid rates.
Effective from January 2020, the AIRB announced a 15% rise in the current grid rate. However, the province still pays the highest of all average premium rates in the country.
What is the Grid Level in Auto Insurance?
The concept of the grid rating system was to make sure that companies could charge a certain premium up to a specified and set maximum. The aim was to put a cap on the premium rate for basic car coverage policies.
As there is a maximum premium rate involved, many drivers might refuse to accept the rate. In such cases, the insurance company can compare the premium set by the grid and the premium set by itself and charge the driver with the lower option between both rates.
What is a Good Grid Level for Insurance?
For both new and experienced drivers to the grid system, they start at grid step 0. They move down one step per year if they have driven without accidents. However, they can move up five grid steps if they are at fault for any accidents within the last six years.
Points to Keep in Mind for Basic Coverages and Grid Premiums
A few pointers can help you know a bit more about the grid level for auto insurance. For starters, around 5.5% of drivers pay the grid rate or are rated under the same by insurance companies.
The premium usually lowers as the insured drivers gain more experience. This is because the insured individual now understands how to steer clear of accidents and situations that might call for claims. However, with each at-fault claim, the premium rises five steps up to the grid’s capped amount for premium payment.
The system applies to basic coverage premiums for automobiles. These include accident benefits and third-party liability coverages.
Why Is There an Increase in the Car Insurance Premium Rate?
With the rise of auto insurance claims, there has been a sudden spike in auto insurance premium rates. And here is why:
Rise in Accidents
There have been a heightened amount of road accidents leading to grave body injuries. These incidents have not only increased injury claims but also auto insurance claims in case of repairs or legal troubles.
Vehicle Theft
Since more car models are releasing and becoming a trend to own, Canada now has a rise in car theft. Back in 2018 in Canada, around 7000 cars were stolen or were under the attempt of theft.
How to Calculate the Alberta Premium?
Let us look at the base factors that help determine insurance premium rates to understand the grid system. So when you are looking at your insurer’s premium quote for your vehicle, here is what they have taken to calculate it:
Your Driving History
Were you a good driver? A well-trained driver with no road violation history can benefit from lower premium rates. However, if your driving history shows that you had driving tickets, parking fines, and crash incidents, it can raise your premium rate in no time.
Your previous car insurance also plays a crucial role in your driving history information. The history of claim frequency, at-fault incidences, etc., show your level of skill and responsibility as a driver.
So if you want an affordable premium rate for car insurance, make sure to keep a clean driving record history.
Your Local Area
Do you live in an urban area with daily traffic or a rural area on the outskirts with peaceful roads? Your area of residence can help insurers determine your insurance rates. An urban area with heavy traffic means more cars on the road. A situation like this leads to a higher chance of crashes and road accidents. Thus, you would have to shell out a higher premium in this case.
However, if you are in a rural or semi-urban area with relatively empty roads and fewer insurance claims, you can enjoy lower premium rates.
Your Car’s Theft Risk
Is your car more likely to be stolen?
The Canadian Loss Experience Automobile Rating (CLEAR) can help check if your car is at high risk of theft. The model number, build, and year of manufacture can show data that helps to determine this.
Now, if you choose an expensive-looking car, there are higher chances of it getting stolen. Therefore, an expensive premium rate can help compensate for such risks.
However, if you have an old car or a second-hand vehicle that is a common make and model, the premium rate is low. These are well-kept vehicles but with no future value. So since they are less prone to theft, you can expect lower premium rates.
Your Age and Other Personal Details
If you have years of driving knowledge, it can make your insurance rates lower. However, if you are a younger driver with minimum driving skills, expect higher rates in premiums due to higher tax cut-offs.
Endnote
If you have been wondering, “what is a good grid level for insurance,” now you know.
When renewing your auto policy, you might find a rise in your premium. The grid system ensures that the rate does not go overboard but stays within the risk calculator.
Of course, with reliable insurance companies, you can expect relatively lowered premium rates through professional services. So if you are in Alberta and looking to check your premium rates, make sure to read through these details on the grid level to stay prepared.
Facebook Comments