There have been many discussions online regarding the new Alberta Care-First system taking effect on January 1st, 2027. The new auto insurance system applies to not just drivers and passengers, but also cyclists and pedestrians, and will increase accident benefits and income benefits, while removing the need to go through a litigation process. The system will continue to be privately delivered since an Alberta public survey showed 83% of people value their ability to select an insurer of their choice rather than a one-size-fits-all approach. This private delivery model still allows for a competitive insurance market, where you can purchase your auto insurance through a broker or agent of your choosing.
To correct some misinformation spreading online, here is everything you need to know about the new system:
Benefit Increases
The government system today:
- Medical and rehabilitation benefits - $50,000 for two years.
- Income replacement benefits - either $600 per week or 90% of your average gross earnings, whichever is less, for up to two years.
- Permanent impairment benefit - None.
- Expenses - None.
- Death benefits - limited to $10,000 (may include increases depending on the situation, $500 per family for grief counselling, $6,150 for funerals.
The new 2027 Care-First system:
- Medical and rehabilitation benefits - unlimited for all eligible expenses for a lifetime, including a monthly sum allotted for personal care assistance for both catastrophic and non-catastrophic injuries.
- Income replacement benefits - $120,000 + industrial average wage at $1088 weekly, help hired for family businesses at max $934 weekly, caregiver weekly indemnities at $541-657 weekly, and a lump sum indemnity for each school year not completed (amount varies depending on school year).
- Permanent impairment benefits - $295,000 for catastrophic injuries, $934-186 000 for non-catastrophic injuries.
- Expenses - meal allowance at max $54.78 daily, clothing allowance at max $1,291 daily
- Death benefits - $74,800-$575, 000 to spouse or partner, $32,000 to disabled dependent, $16,000 to no-dependant child or parent, $4,000 max per person for grief counselling, $10,000 max for funerals.
Do I still need to sue?
The current system allows not at-fault drivers to sue at-fault drivers for more medical or income support than the given amount covered under their insurance policy. A lawsuit may take years to resolve and has no guarantee of success. Even if the not at-fault driver wins, the award amount may not be sufficient if they sustained catastrophic injuries due to maximum liability limits under the policy.
The Care-First system removes the need to sue because any injured party, regardless of fault, would get the unlimited medical and rehabilitation benefits for a lifetime, as well as all the other benefits listed above. There is no need for parties to undergo expensive and time-consuming litigation processes, therefore reducing the cost of insurance.
Even so, a not at fault driver can still sue the at fault driver’s insurance company in situations where:
- At-fault drivers are convicted of Criminal Code offences or select Traffic Safety Act offenses.
- They need expenses exceeding the benefit limits in the care-first model (this should be very few, as the benefits are vast under this system).
