Insurance premium hikes will jolt drivers. Does promise of future savings make it all worthwhile? [Video]

When the government touts that its auto insurance reforms might curb premiums by $400 come 2027, the ministers and premier don’t readily mention what’s to come in the three years leading up to that.

For this year and the next two, Alberta is permitting annual rate increases of 3.7 per cent, 7.5 and 7.5 per cent, respectively. That amounts to about $325 more for the average driver.

Steps forward, steps back.

Except there are no guarantees the $400 savings will come at the end of this overhaul; that will depend on as many economic factors as actuaries can calculate.

Even if Alberta heavily regulates auto insurance, it can make no guarantees of what costs the free-market businesses will need to cover in a few years’ time.

“We regulate this industry, but it isn’t magic,” Finance Minister Nate Horner said.