A Care-First Auto Insurance System for Alberta
What is a "care-first" system of auto insurance?
In a care-first system, Albertans injured in a vehicle collision will receive higher benefits to support their recovery.
Albertans will still be able to sue an at-fault driver in certain cases (like if the other driver is convicted of a Criminal Code driving offense), and at-fault drivers will be held accountable through higher premiums.
Albertans can expect to see a reduction in their premiums, compared to what they pay today.
When will Albertans see savings on the auto insurance?
A system change of this size will take time to implement. The new care-first system will be effective January 1, 2027.
Where can I get the best information and facts on the new care-first system?
Our website will provide the most up-to-date information on the implementation of the care-first system and subsequent impact to Alberta drivers. While there is a lot of information available online (social media, blogs, etc.) not all of it is 100% accurate. Check back here often for updates and feel free to email us with your questions.
How does a care-first system improve benefits?
Albertans injured in a collision will have access to substantially increased benefits. For example:
- Today, medical and rehabilitation benefits are limited to $50,000 for two years. Under the care-first system, these benefits will be unlimited over your lifetime.
- Today, the income replacement benefit is currently the lessor of $600 per week and 90% average gross earnings, for up to two years. Under the care-first system, the maximum insurable gross yearly income of $120,000 is payable until you reach the age of 65.
All Albertans injured by an auto accident (at-fault, not at-fault, pedestrian, cyclists, etc.) will receive benefits under the new system.
Why will it take until 2027 to implement?
Moving to a privately-delivered care-first auto insurance system is a large undertaking. This is the first of its kind in Canada.
Insurers have sophisticated computerized pricing systems and require significant time and resources to make even the smallest changes.
The first step to implement the reforms is the introduction of legislation, which is expected in the spring of 2025. Should the legislation pass, the government will introduce regulations to implement and oversee the new care-first system. Once these regulatory steps are complete, insurers will begin to modify their systems and train their staff.
Brokers, agents and adjusters will also need to complete system updates and training to ensure they are ready to support Alberta drivers through this change.
Why is Alberta going with a private delivery model, when care-first models in other provinces are all publicly delivered?
The government heard from Albertans through a public survey, and 83% of respondents said they value the ability to select an insurer of their choice and a one-size-approach does not work for all. A privately-delivered, care-first model of insurance will promote a competitive auto insurance market in Alberta.
What are my options to manage my auto insurance premiums until 2027?
To address affordability challenges, the Government of Alberta implemented short-term reforms, including the good driver rate cap.
In 2024, rate increases for good drivers were capped at 3.7%.
In 2025, Alberta will continue supporting Albertans with good driving records by capping their rate increases. Rate increases for good drivers will be capped at 5% per year and there will be an additional 2.5% rider allowed due to natural disaster-related costs, including the Jasper wildfire and Calgary hailstorm of 2024 - for a total of 7.5% good driver rate cap in 2025.
In 2024, Albertans with good driving records saw their rates increase capped at 3.7%. Those drivers who did not receive the rate cap in 2024 due to implementation timing by their insurer will be capped at 3.7% in 2025, providing they still meet the definition of Good Driver at renewal.
There are other options you can consider to lower your premium such as increasing your deductible or reducing coverage. Click here to see our Top 10 ways to reduce your rates.
If you are excluded from the good driver rate cap you may save by shopping the market. Click here to review our guide to shopping the market.
