It's Not You, It's Me (But It's Mostly You): Why Auto Insurers Are Ghosting Alberta

If you're feeling a bit like you've been ghosted by your car insurance company lately, you're not alone. When Zenith Insurance, the company behind Costco’s auto policies, first announced it was leaving the province, the Premier was unfazed. "I'll believe it when I see it," she said, suggesting that the lure of Alberta’s "free enterprise system" was too strong for any sane company to resist. Well, a steady stream of insurers have followed suit, each leaving a polite but firm "it's not working out" note on their way. This exodus has exposed a bizarre and painful paradox at the heart of Alberta's auto insurance market: Albertans are paying some of the highest premiums in the entire country, yet the companies cashing those premium cheques are fleeing because, they claim, they can’t turn a profit.  

Before we get into the messy breakup details, let's meet the companies that have already packed their bags:

Company Parent Company Official Reason Between the Lines Translation

Zenith Insurance Not publicly specified "We're quietly backing away before anyone notices."

Sonnet Insurance Definity Financial "Limited opportunities to grow profitably" "We're losing our shirts and this market is a financial black hole."  

Aviva Direct Aviva Canada "Environment doesn't foster growth" "We're tired of paying everyone's legal bills after losing $250 million."

CUMIS The Co-operators "Ongoing challenges...rising cost of claims" "The math just doesn't work anymore."

If the rate cap is the spark, then the high cost of settling claims through the legal system is the barrel of gasoline.
Look, we all appreciate a good courtroom drama, and lawyers play a vital role in ensuring people are fairly compensated. The issue isn't the lawyers themselves, but a system that has become incredibly expensive. Legal fees now account for roughly 20 cents of every dollar you pay for your mandatory auto insurance premium. The average legal settlement for a car accident in Alberta has surged 116% in the last decade to over $100,000—a Canadian record. These costs are now double Ontario's and triple those in some Atlantic provinces, a reality Aviva explicitly cited when it decided to leave.   Add in the fact that modern cars are basically computers on wheels (and just as expensive to fix), that Alberta is the hailstorm capital of Canada, and that car theft is rampant, and you have a financial nightmare. The result is as predictable as it is grim. In 2024, for every dollar in premiums that insurers collected from Alberta drivers, they paid out roughly $1.20 in claims and expenses. You don't need a business degree to know that's not a sustainable model.  

The government's grand plan to fix this mess is a new "Care First" system set to launch in 2027, which is basically a no-fault model with a catch. It keeps a "limited right to sue" in certain cases, a feature that one analysis suggests could add up to $136 to every driver's premium, potentially wiping out any savings the reform was meant to create. Perhaps that's why the government has quietly stopped mentioning its initial promise of a $400 premium reduction.  

For now, Alberta drivers are stuck. The exodus of insurers means less competition, which almost always leads to higher prices for everyone. While the market sorts itself out, the best defence is a good offence. As your brokerage, we have access to the insurers who are still committed to the province.
We can help you navigate this chaotic market, compare your options, and find the best possible coverage for your needs.