Alberta’s auto insurance landscape is on the brink of its most significant transformation in decades. The provincial government is moving away from the traditional at-fault system towards a Care-First no-fault insurance model, a change that promises to reshape how injury claims are handled after a car accident. This pivotal shift, aimed at providing faster medical care and potentially lower insurance premiums, also fundamentally alters the rights of injured Albertans. For every driver in the province, understanding these new rules isn’t just important—it’s essential for navigating the road ahead.
The Evolution of Alberta’s Auto Insurance System
For years, Alberta has operated under a tort-based, or “at-fault,” system. This model allowed individuals injured in a motor vehicle accident to sue the at-fault driver for damages, including pain and suffering. However, the Alberta government takes the position that this system is becoming financially unsustainable. Citing rising costs, the government points to data showing that for every dollar insurers collected in premiums, they paid out $1.17 in claims and expenses in 2024. In addition, the argue that legal costs associated with injury claims, have prompted a push for systemic insurance reforms, culminating in the proposed no-fault auto insurance system.
What This Guide Will Cover
This comprehensive guide will break down Alberta’s new Care-First auto insurance system. We will explore what no-fault insurance truly means, detail the benefits available to injured individuals, and explain the critical changes to your right to sue. We’ll also examine the new claims process, analyze the potential impact on your insurance premiums, and provide practical advice for all Albertan drivers navigating this new reality.
Understanding Alberta’s Care-First No-Fault Insurance System
The term Care-First is the Alberta government’s branding for its specific version of a no-fault system. While it emphasizes immediate access to medical treatment, it’s crucial to understand the underlying mechanics of no-fault insurance to grasp the full scope of the changes.
What is No-Fault Insurance?
Comparison of claims processes: At-Fault vs. No-Fault Insurance
At its core, a no-fault insurance system means that if you are injured in a car accident, you will deal with your own insurance company for benefits and compensation, regardless of who caused the collision. They argue that the primary goal is to remove the need for lengthy and expensive legal battles to determine fault before an injured person can receive care. Instead of suing the other driver, your insurer provides a pre-defined set of benefits for medical expenses, rehabilitation, and income loss. This model is intended to streamline the claims process and get benefits to injured victims more quickly.
The Care-First Model: Alberta’s Specific Approach
Alberta’s Care-First model is a no-fault system that the government says will focus on providing immediate access to medical and rehabilitation benefits. Under this care-first model, the primary relationship after an accident is between the injured individual and their own insurance company. The insurer becomes the single point of contact responsible for coordinating and funding necessary medical treatment and other support.
This approach, outlined in government proposals connected to insurance reforms like Bill 47, is designed to prioritize recovery over litigation. However, this efficiency comes with a significant trade-off: it severely restricts the ability of injured individuals to sue an at-fault driver for pain and suffering, a cornerstone of the previous auto insurance system.
Benefits and Coverage: What Care-First Means for Injured Albertans
The central promise of the Care-First model is a more robust and responsive package of accident benefits delivered directly by your insurance company. This shifts the focus from a lump-sum court settlement to ongoing, managed care.
Medical and Rehabilitation Benefits
Under the proposed no-fault system, anyone injured in a motor vehicle accident will have access to comprehensive medical and rehabilitation benefits. This coverage is intended to be immediate and all-encompassing, covering everything from emergency medical treatment at the scene to long-term physical therapy and psychological counselling. The benefits are designed to cover all necessary medical expenses to help injured Albertans recover to the fullest extent possible. This includes costs for physiotherapy, chiropractic care, massage therapy, dental work, and modifications to a home or vehicle if required due to a serious injury. The system is meant to remove financial barriers to accessing essential medical treatment promptly.
Income Replacement Benefits
For those whose injuries prevent them from working, the Care-First model includes income replacement benefits. These payments are designed to provide a financial safety net by replacing a significant portion of your lost earnings. The specific amount and duration of these benefits will be defined by the regulations within the Automobile Insurance Act.
In a recently released Intentions Paper, the Government of Alberta confirmed that the maximum insurable income amount will be $125,000 which would be the highest in Canada when compared to other no-fault or care-based systems. The government’s position is that this level of coverage will allow injured individuals to focus on their recovery without the immediate stress of total income loss, providing stability while they are unable to work.
Other Available Benefits
Beyond medical care and income support, the new system may include a range of other benefits to assist with recovery and daily life. These can include coverage for caregiver expenses if you are unable to care for your dependents, housekeeping assistance if your injuries prevent you from maintaining your home, and educational or vocational training if you are unable to return to your previous job. For catastrophic injuries, benefits are designed to be more extensive, providing lifelong care and support for the most seriously injured victims.
The Shift in Rights: Limiting the Ability to Sue for Pain and Suffering.
The most contentious aspect of Alberta’s move to a no-fault auto insurance system is the significant limitation it places on an individual’s right to pursue legal action against a driver who causes an accident.
Understanding the Previous “At-Fault” System
In Alberta’s traditional at-fault system, determining who was responsible for a collision was paramount. Injured individuals had the right to sue the at-fault driver for damages. This lawsuit could seek compensation not only for quantifiable losses like medical bills and lost wages but also for non-economic damages, commonly known as “pain and suffering.” This legal recourse provided a mechanism for holding bad drivers accountable and compensating victims for the physical pain, emotional distress, and loss of quality of life resulting from their injuries.
New Limitations on Legal Action
The Care-First model virtually eliminates this right. Under the new no-fault system, you can no longer sue the at-fault driver for pain and suffering damages, regardless of the severity of your injury. Instead, compensation is limited to the schedule of benefits provided by your own insurance company. This change is a fundamental departure from the principles of the old system.
A poll by Janet Brown Opinion Research highlighted public sentiment on this issue, finding that 71% of Albertans disliked the inability to sue an at-fault driver. This restriction on legal action is the primary mechanism through which the government expects to reduce costs within the auto insurance system.
Exceptions and Residual Rights
While the right to sue for pain and suffering is largely removed, there may be very limited exceptions. The most common exception in no-fault jurisdictions is the ability to sue in cases of criminal negligence, such as an accident caused by an impaired driver who is convicted of the offence. However, for the vast majority of car accident scenarios, the courthouse doors will be closed for injury claims.
Your right to sue for property damage to your vehicle will remain, but the avenue for seeking compensation for your physical and emotional suffering will be gone. We provide more information regarding situations when Albertans will be able to sue in this blog post here.
Navigating the New Claims Process After a Motor Vehicle Accident
With the shift to a no-fault insurance system, the steps to take after a car accident will change, especially concerning injury claims. The focus moves from dealing with the other driver’s insurer to working exclusively with your own.
Immediate Steps at the Scene of an Accident
The immediate actions at the scene of an accident remain largely the same. Your first priority is safety. Check for injuries, call the police and move to a safe location if possible. Exchange information with the other driver, including names, contact details, driver’s license numbers, and insurance information. Take photos of the scene, vehicle damage, and any visible injuries. It is crucial to report the collision to the police and get a police report number, as this will be a key document in your claims process.
Initiating and Managing Your Injury Claim
Under the Care-First model, you must notify your own insurance company of the accident and any injuries as soon as possible. Your insurer will provide you with the necessary forms to start your injury claim. You will need to provide details of the accident and consent for your insurer to access your medical records related to the injuries. Your insurance adjuster will then work with you and your healthcare providers to approve and coordinate your medical treatment and benefits. Documentation is critical; keep detailed records of all appointments, treatments, expenses, and communications with your insurance company.
Dispute Resolution under Care-First
If you disagree with a decision made by your insurance company regarding your benefits or medical treatment, you will no longer be able to take the matter to court. Instead, the new system will feature a dispute resolution process. This will likely involve an internal review or appeal process within the insurance company, followed by recourse to an independent administrative tribunal or mediator. This body will be responsible for adjudicating disputes between injured individuals and their insurers, making final decisions on benefit eligibility and amounts.
The Impact on Your Premiums: Promises vs. Concerns
One of the Alberta government’s primary justifications for introducing a no-fault auto insurance system is the promise of more stable and affordable insurance premiums for drivers.
The Provincial Government’s Vision for Lower Premiums
The government’s argument is that by removing legal costs associated with the at-fault system, the overall expense of auto insurance will decrease. The Government points to the survey conducted by the General Insurance Statistical Agency, legal costs currently account for about 20% of mandatory auto insurance premiums in Alberta. The Government of Alberta argues that by eliminating most lawsuits for injury claims, the provincial government projects that these savings will be passed on to consumers in the form of lower premiums. They say that the goal is to create a more predictable and cost-effective system for everyone.
Industry and Consumer Perspectives on Premiums
Many consumer advocates and legal experts are skeptical of these promises. They point to other jurisdictions, like British Columbia, where the introduction of a similar no-fault system did not result in the long-term premium reductions that were promised. Critics argue that while litigation costs may decrease, the costs of providing comprehensive care benefits could rise. There are also concerns that without the oversight of the courts, insurance companies may have more control, and administrative costs could inflate, eroding any potential savings.
Rate Caps and Future Outlook
The conversation around premiums is happening at a time when costs are already a major concern for drivers. The average auto insurance premium in Alberta saw a 5.2% increase from 2022 to 2023. While the government may implement temporary rate caps to ease the transition, the long-term trajectory of premiums under the “Care-First” model remains a subject of intense debate. The ultimate financial impact on Albertan drivers will only become clear after the new system has been fully implemented.
Alberta’s Care-First Model in Context: A Look at Other Jurisdictions
Alberta is not the first province to adopt a no-fault insurance system. Looking at the experiences of other jurisdictions, particularly neighbouring British Columbia, can provide valuable insight into the potential outcomes of this reform.
Distinguishing Alberta from British Columbia’s Enhanced Care
British Columbia shifted to its “Enhanced Care” no-fault model in 2021. While both systems eliminate the right to sue for most injuries, there are key differences. BC’s system is administered by a public insurer, the Insurance Corporation of British Columbia (ICBC), whereas Alberta’s model will continue to be run by private insurance companies. Critics of Alberta’s plan worry that a private delivery model may prioritize profit over care, a concern not as prevalent in BC’s public system. Lessons from BC’s transition, including initial premium reductions followed by questions about long-term sustainability and care adequacy, are being closely watched.
A Brief Comparison to Other No-Fault Systems
Other provinces like Saskatchewan, Manitoba, and Quebec have long-standing no-fault or hybrid insurance systems, each with unique features. Quebec’s public system, for example, offers a different balance of benefits and restrictions. By examining these various models, it becomes clear that the specific rules governing benefits, dispute resolution, and premium setting can have a profound impact on the success and public acceptance of a no-fault auto insurance system. It is expected that regulations that spell out these details will be released in the Fall of 2025, with further implementation details rolled out in 2026 and closer to 2027.
Essential Practical Advice for Albertan Drivers
As these significant insurance reforms take effect, it is more important than ever for drivers to be proactive and informed.
Reviewing Your Auto Insurance Policy
Take the time to thoroughly review your auto insurance policy with your broker or agent. Understand the new structure of benefits, including the limits and definitions of what is covered. Ask specific questions about coverage for catastrophic injuries, income replacement calculations, and any optional benefits you can purchase to enhance your protection. Being knowledgeable about your policy is your first line of defense in the new system.
What to Do If You Are Injured
If you are injured in an accident, ensure you call the police to attend the scene of the accident, as the investigation conducted by the police at the scene of the accident, could be critical to whether any of the involved drivers are charged and eventually convicted. Remember that conviction will be crucial to whether you are able to sue or not. In addition, your immediate priority is to seek medical attention. Report the accident to your insurance company promptly to begin the claims process. Be diligent in documenting everything related to your injuries and treatment.
Keep a journal of your symptoms, save all receipts for medical expenses, and maintain organized records of all communication with your insurer. Seeking immediate legal advice is still crucial to help you determine your rights and responsibilities, if you encounter significant disputes regarding your care and insurance claim.
Conclusion
The transition to a Care-First no-fault insurance system represents a monumental change for every driver in Alberta. This new model fundamentally redefines the relationship between drivers, insurance companies, and the concept of justice after a collision. The provincial government champions the system as a way to provide faster care and reduce premiums by cutting legal costs.
For Albertans, the path forward requires vigilance and education. It is crucial to understand the new benefits you are entitled to, the revised claims process you must follow, and the limitations that may be placed upon your legal rights. Review your insurance policy, ask questions, and be prepared to advocate for the care you need. As this new chapter in Alberta’s auto insurance history unfolds, staying informed will be every driver’s most valuable asset.
It is important to note that Care-First will not take effect until January 1, 2027. Before then, if you get into an accident, call our office to speak with one our lawyer.
Watchmaker Law is an Alberta based personal injury law firm that can assist you with your Care-First benefits claim when it is implemented in 2027. The firm is led by David Sowemimo, one of Canada’s Top 25 Most Influential Lawyers. He has handled cases in both no-fault and fault jurisdictions. Our firm can be reached at 825-203-9801, or you can chat with us in the chat box below.
