What Is A Good Grid Level Insurance? If you live in Alberta, the insurance rate grid system may be a familiar concept. Your neighbour may pay lower insurance rates for your car than you. Several factors can help determine your auto insurance rates. Of course, these are also included in the network qualification program.
What Is A Good Grid Level Insurance?
If you are looking for affordable auto insurance rates, well-known companies like Surex can help. But before that, it is better to know the levels of the auto insurance network in Alberta.
A brief history
Alberta’s Network Rating Program has been in existence since October 2004. It was created to set and fix a maximum price cap on Alberta’s insurance premiums. The Automobile Insurance Rates Board (AIRB) says that 94% of policyholders pay less than the specified network level, while 6% pay adequate network rates.
As of January 2020, the AIRB has announced a 15% increase in the current network fee. Yet the province still pays the highest average premium in the country.
What is Alberta’s “network” system and how does it affect my rates in this province?
In October 2004, the Alberta government created a grid tool to determine the maximum price of insurance premiums for the coverage you should have. The grid system consists of 3 steps that determine your premium:
Step 1 – Determine your basic premium
This grid shows where you live (Edmonton, Calgary, or anywhere else in Alberta) and how much liability coverage you choose.
Step 2: Determine the premium for your mandatory cover
Every insured driver deserves a network-level designation based on their years of driving experience and their accident claims.
Step 3: Factors in Your Driving Record
This takes into account whether you have had any convictions in traffic or criminal law in the past 3 years.
What is the Grid Level in Auto Insurance?
The concept of the network rating system was to ensure that companies could charge a certain premium up to a certain fixed maximum. The aim was to limit the premium for basic auto cover policies.
Because there is a maximum premium, many drivers may refuse to accept the compensation. In such cases, the insurance company can compare the premium set by the network with its own and charge the driver the lowest option between the two rates.
What Is A Good Grid Level Insurance?
Both new and experienced drivers in the grid system start at grid step 0. They go down one step per year if they have driven without accidents. However, they can go up five steps on the grid if they are guilty of accidents in the last six years.
Points of attention for basic coverage and network premiums
A few tips can help you learn a little more about the net level for auto insurance. For starters, about 5.5% of drivers pay the network rate or are rated below it by insurance companies.
The premium usually decreases as insured drivers become more experienced. This is because the insured can now avoid accidents and situations that may require claims. However, with each negligence claim, the premium is increased by five increments up to the premium payment limit in the network.
The system applies to premiums for basic car cover. These include accident benefits and third-party liability coverage.
Why is car insurance premium increasing?
With the increase in auto insurance claims, there is a sudden surge in auto insurance premiums. And here’s why:
There have been a large number of traffic accidents resulting in serious bodily injury. These incidents have not only increased the number of personal injury claims, but also auto insurance claims in the event of repairs or legal problems.
With more car models being released and becoming a trend, Canada now has an increase in car thefts. In 2018, approximately 7,000 cars were stolen or attempted to be stolen in Canada.
How to calculate the Alberta premium?
Let’s look at the basic factors that help determine insurance premiums to understand the network system. So if you look at your insurer’s premium quote for your vehicle, here’s what they took to calculate it:
Your driving record
Were you a good driver? A well-trained driver with no history of traffic violations can benefit from lower premium rates. However, if your driving record shows that you had driver’s licenses, parking tickets and accident incidents, you can increase your premium in no time.
Your previous car insurance policy also plays a vital role in your driving records. The history of the frequency of claims, incidents of failures, etc., shows your level of skill and responsibility as a driver.
So if you want an affordable auto insurance premium, make sure you keep a clean driving record.
Your local area
Do you live in an urban area with daily traffic or in a rural area on the outskirts with quiet roads? Your area of residence can help insurers determine your insurance rates. An urban area with a lot of traffic means more cars on the road. A situation like this leads to a greater chance of accidents and traffic accidents. In this case, you would therefore have to pay a higher premium.
However, if you’re in a rural or semi-urban area with relatively empty roads and fewer insurance claims, you may be able to take advantage of lower premium rates.
Has your car been stolen faster?
The Canadian Car Loss Experience Rating (CLEAR) can help verify if your car is at high risk of theft. The model number, year of manufacture, and year of manufacture may contain data to help determine this.
Now if you choose a car that looks expensive, it is more likely to be stolen. Therefore, an expensive premium rate can help offset such risks.
However, if you have an old car or a used car of a common make and model, the premium is low. These are well-maintained vehicles but without future value. So because they are less prone to theft, you can expect lower premiums.
Your age and other personal information
If you have years of driving experience, you can lower your insurance premiums. However, if you are a younger driver with minimal driving skills, you can expect higher premium rates due to higher tax cuts.
Conclusion – What Is A Good Grid Level Insurance
If you’re wondering, “What Is A Good Grid Level Insurance?”, now you know.
When you renew your car policy, you may see an increase in your premium. The grid system ensures that the rate is not exceeded but remains within the risk calculator.
Of course, you can expect relatively lower premiums from reliable insurers due to professional services. So if you’re in Alberta and want to check your premium rates, read these grid-level details so you’re prepared.