The Easy Way To Get Your Car Insurance

Insurance Tips & Information

Get quotes now!

  • Fill in only one form        
  • Get quotes in minutes       
  • Free service       

Insurance Tips & Information

The Easy Way To get insurance information

Back to insurance articles

The Grid Rating System In Alberta

July 11, 2013

The Alberta Automobile Insurance Rate Board sets maximum premiums based on a series of calculations collectively known as the Grid Rating System. This program sets rates for basic insurance coverage. An individual's Grid rating will vary according to his or her driving record.

Grid rates vary according to driving history, and incidents such as tickets and traffic accidents can trigger rate increases. However, since the Grid rating program is complex, the best way for Alberta drivers to determine their Grid level is to consult a professional. Brokers and agents in the automobile insurance industry deal with the Grid rating system on a daily basis and are the best resource to handle this type of inquiry.

How the Grid Program Works

The Grid rating program essentially functions as an insurance cap. Individual drivers will not have to pay more for coverage than the amount dictated by their Grid level; in most cases they will pay less. Approximately 90% of Alberta''s drivers do not pay the full amount they would be charged under Grid.

Drivers who would normally expect higher rates, such as those who have less experience behind the wheel and those with tickets and accidents on their record, benefit most from the Grid program. Although they do pay the maximum allowable rate, it is reasonable to speculate that without the existence of the Grid, such drivers would be paying even more for insurance coverage.

Insurance companies are required to look at two rates when they determine a driver's premium. They must examine the premium they would charge the individual if the Grid program did not exist, then compare that amount to the premium they are allowed to charge the same individual under the Grid program. After this comparison is done, the insurance company must charge the driver the lesser of the two amounts. In approximately 10% of cases in Alberta, this comparison results in a savings to the individual consumer. Get Alberta car insurance at least once a year to get the most savings.

The Grid program does not apply to all types of automobile insurance. It only controls costs charged for basic coverage. This type of coverage includes accident benefits and third party liability claims, but does not include other kinds of insurance products. For full details, it is best to speak with a car insurance broker or agent; automobile insurance professionals can explain the various kinds of coverage in detail. and demonstrate how the Grid rating system applies in your particular case.

The Grid program is designed so that as drivers become more experienced behind the wheel, their premiums decline. This scenario assumes no traffic convictions or insurance claims. Inexperienced drivers will start at the Grid step known as -2 as long as they have received driver training. The -2 step is at 10% below entry level. Each additional year of excellent driving causes a reduction in rates; this is known as moving down the grid. Conversely, every at-fault claim will cause a driver to move up the grid.

In addition to Grid rating, there is also the issue of surcharges to consider. While at-fault claims will cause your Grid level to rise up the grid of possible maximum rates, traffic convictions on your driving record allow insurance companies to assess surcharges. These charges are above and beyond the Grid maximums you would otherwise be charged. Insurance companies are also permitted to assess surcharges if the frequency of your accidents is above certain limits.

The best way to keep your auto insurance rates low is to establish and maintain a clean driving record. To understand your Grid level further and determine your individual insurance rate based on your current driving record, speak with a broker or agent today.

Car InsurancePopular PagesRecently Visited Pages