What’s in store for auto pricing in Alberta and Ontario

Driven by rising vehicle repair costs, and higher frequency of claims and vehicle thefts, auto insurers face upward pressure on premiums, says digital broker Surex’s 2026 outlook for Alberta and Ontario.

Here’s how the two provinces stack up.

Alberta

“Alberta’s auto insurance story in 2026 is fundamentally a story about suppressed prices,” says Surex CEO and co-founder Lance Miller in his outlook for the province. “The province’s good driver rate cap is staying in place at 7.5% through 2026, which means many ‘good drivers’ will be insulated from the full force of claims cost inflation — at least on paper.”

At the same time, the caps prevent many insurance companies from being able to pass the full cost of insurance increases on to customers for the past few years. And that means those costs are disproportionately being passed on to new drivers.  

He adds recent reports find insurers’ 2024 expenses outpaced revenues by about $1.2 billion. And it’s expected inflation-driven claims severity, theft and losses from weather-related incidents will continue to outpace the cap this year. 

“If returns remain inadequate in Alberta, carriers will protect results by narrowing appetite, tightening underwriting, and reducing exposure in higher-risk segments,” says Miller. “This has already happened as some insurance companies have decreased the amount of business they do in the province.”

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As a result, Alberta’s insurance market is becoming less competitive. “Drivers who fall outside the ‘good driver’ definition are finding it increasingly difficult to secure insurance as a lack of competition decreases their options,” he adds. “And even for capped drivers, the system can create catch-up dynamics: if costs rise faster than allowed rates for multiple years, insurers look for lawful ways to close it — through rating refinements, coverage adjustments and higher deductibles.” 

He says many people classified as good drivers can expect renewals “in the mid-single digits up to the 7.5% ceiling.” And some customers will see less depending on their insurer, vehicle and region, while “other drivers will be stuck with larger increases.” 

Things may change next year as the province transitions to its Care First model, slated to launch Jan. 1, 2027. “But until structural claim costs are addressed, the near-term outlook remains one of upward pressure constrained by regulation rather than resolved by market dynamics,” says Miller.   

Ontario

Pricing in Ontario will likely be steady in 2026, “with increased consumer-choice potentially driving down prices for some in the back half of the year,” says Matt Dillon, Surex’s executive vice president of national operations.

Price drivers will be similar to what’s seen in other provinces – high repair costs, rising bodily injury and benefits costs, and vehicle theft.

This year, the province will see a 2.4% raise in injury claim benefit amounts, which reflects inflationary pressure.  

“Where Ontario differs is the mechanics of rate change. Insurers must obtain regulatory approval for rate changes, and FSRA [Financial Services Regulatory Authority] positions its role as ensuring proposed rates are fair and reasonable — based on evidence and actuarial support,” says Dillon. “Practically, that means rate movement tends to show up as a steady drumbeat of approved changes across carriers rather than a single province-wide ‘cap’ number.” 

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During the first half of 2025, Ontario experienced a 4% increase in average premium, according to Surex data. This maintains a trend of rising costs since the COVID-19 pandemic.

“Against that backdrop, we expect 2026 renewals to generally come in line with 2025 for many households, as inflation remains stable and some major issues such as theft have levelled off,” adds Dillon. “The biggest wildcard is the province’s upcoming accident benefits reform effective July 1, 2026, which makes several currently mandatory Statutory Accident Benefits (SABS) coverages optional (while keeping a core set mandatory).” 

This means:

• Consumers keeping existing benefits should expect premiums to reflect the underlying loss trend. A typical driver should expect similar increases to annual premiums in 2026 versus 2025. Rates could be higher for those driving expensive vehicles or living in high-theft postal codes. 
• Those opting to remove optional benefits after July 1 could see some premium relief — but Surex notes, “it’s important that drivers consult with a broker before making such changes.” 

“Netting it out, Ontario’s 2026 pricing outlook is a moderate-to-meaningful increase for most drivers compared with 2025, with more fluctuations than usual because consumers will increasingly be choosing between richer protection and lower upfront premiums in a new, more à la carte framework,” says Dillon.