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Vehicle insurance companies will be watching closely to see whether the Alberta government continues to push forward with a proposal to increase some highway speed limits to 120 km/h.
The province launched an online service survey to increase speed limits on more than 2,150 kilometers of divided highways in different parts of Alberta. The study also asks which highways should be prioritized for higher speeds.
The government plans to begin the trial after the survey concludes on December 12.
The proposed speed limit change comes at a time when Alberta already has some of the highest insurance premiums in the country.
In recent years, insurance companies have faced the problem of unprofitability, which has led to several companies recall from the province.
Many factors affect the cost of insurance, including the number and severity of collisions.
Increasing speed limits won't necessarily lead to higher insurance premiums, but speeding is a major factor in many accidents.
“If it had a direct correlation, I think then yes, it could have an impact on increasing premiums for consumers,” said Matt Dillon, executive vice president of Surex, an online insurance broker.
“If any factor is associated with an increase in the frequency or severity of claims, the price adjustment will ultimately be passed on to the consumer.”
Speed limits above 120 km/h exist in other parts of the world, including the US and Europe.
There is only one stretch of road in Canada with a 120 km/h speed limit – on the Coquihalla Highway between Kamloops and Hope, British Columbia.
Originally in 2014 B.C. increased the speed limit to 120 km/h. on three major multi-lane highways, and will also increase speed limits on 30 other highway sections. Many of these changes were reversed in 2018 after serious and fatal accidents.
According to the Insurance Corporation of British Columbia (ICBC), fatal crashes are up 118 percent, personal injury claims at the Insurance Corporation of British Columbia (ICBC) are up 30 percent, and total claims are up 43 percent. study published professors at the University of British Columbia in 2018.
The ICBC website describes speeding as the leading contributing factor to traffic deaths in British Columbia.
An ICBC spokesman said this week that the agency would not be able to estimate how speed limits or crashes in the same corridor would affect insurance premiums.
Waiting for data
“In general, it can be assumed that at higher speeds the severity of injuries could be much worse,” Dillon said. “If this does come to fruition, it will be built into the pricing of the policies.”
But for now, insurers will have to wait for claims data if the speed limit changes come into force.
“Auto insurance premiums are determined actuarially, meaning they rely on claims data to help predict future costs. Part of the premium calculations are based on where the driver lives rather than the specific roads they drive on,” said Rob de Pruit, national director of the Insurance Bureau of Canada, in an emailed statement.
The president of the Calgary Firefighters Association says the growing trend of speeding on Stoney Trail is not only dangerous, but it's also putting an unnecessary strain on resources.
It's unclear whether increasing highway speed limits will affect insurance rates, Alberta Transport Minister Devin Dreeshen said.
“There are a variety of jurisdictions and traffic data that the insurance bureau and others can use to see whether the higher speed limits set for a proposed road are a safe way to travel,” he said.
New cars are the most expensive in Alberta compared to to all other provinces – $68,948. More expensive vehicles typically cost insurers more to repair or replace, resulting in higher insurance premiums.
“It’s going to be a worry.”
Dreeshen said Alberta could see more crashes due to the province's growing population, which in turn will lead to more drivers on the road.
On average, there are two cars per household in Alberta, the highest of any Canadian province.
Alberta is also higher national average according to Transport Canada.
The provincial government's decision to impose higher speed limits sends an unsafe message to drivers, Staff Sgt. Andy Woodward of the Calgary Police Service.
“We have to be realistic,” he said. “We have a speed limit of 110 km/h. People will now always drive at 130. If we give them 120, will they drive at 140 or 150? Yes, they probably will, so I would say that will be a problem.”
