Auto insurance premiums could increase for Albertans under the province’s new Care-First system, says the Insurance Bureau of Canada (IBC). The company says it’s reviewed a report from consulting firm MNP that found the maintaining the ability of drivers to sue other drivers in an accident would add $136 in annual premiums. IBC says it wants the Alberta government to resist pressure to keep this ability in the new system. “Litigation in Alberta’s auto insurance system creates significant costs for Alberta drivers. Removing this, to improve affordability and care, is the main reason the government decided to transition to its Care-First model,” said Aaron Sutherland, IBC’s Pacific and Western vice-president in a news release. “The provincial government designs and mandates the auto insurance products that insurers must sell. No other province with a care-based system permits the ability to sue as envisioned in Alberta because of the significant costs it adds for drivers, while doing nothing to improve care for those injured in collisions.” IBC says legal costs are increasing by 9.7 per cent and benefit costs are increasing by 11.9 per cent – much faster than the government’s 7.5 per cent auto insurance cap can handle. With higher repair costs, inflation and tariffs, the inclusion of tort access in the Care-First model could risk its failure, IBC says. “The Alberta government is trying to deliver significant savings under the new system, but current auto insurance rates are under tremendous pressure,” said Sutherland. “The insurance industry supports the government’s goal of making auto insurance more affordable for Alberta drivers. But to do that, a significant course correction is needed.” Lawyers’ association disputes figures A group that represents civil lawyers in Alberta says IBC’s claim that the province’s Care-First plan will cost drivers more money is false. The Alberta Civil Trial Lawyers Association (ACTLA) says the plan will actually save drivers money and offer more protections. “These consumer-first reforms could save drivers more than the IBC’s claimed $136/year - without removing access to justice,” said Owen Lewis, ACTLA spokesperson. “However, we aren’t surprised insurance companies don’t want Albertans to have the ability to hold them to account or exercise their legal rights. Especially after a report from the Alberta Superintendent of Insurance revealed that auto insurers in Alberta had been fined more than $3.1 million for overcharging consumers.” ACTLA says under a no-fault system insurance companies have greater control over claims and consumers lose key protections such as the right to challenge unfair denials and seek legal recourse against at-fault drivers. “No-fault doesn’t just strip Albertans of their right to hold bad drivers accountable - it shields insurance companies from scrutiny, removes consumer protections, and locks Albertans into a system where insurers call all the shots,” Lewis said. The final look of Alberta’s Care-First model hasn’t been announced. The system is expected to come into effect in approximately 18 months.
