Cost questions linger over province’s ‘care-first’ auto insurance overhaul

The Alberta government is developing new legislation aimed at lowering auto insurance premiums, but some say it remains to be seen if it will work.

While the group representing Canadian insurance companies says Alberta’s plan to shift the province’s auto-insurance system to a care-first model will provide the most generous benefits in the country, it wonders whether it will ultimately save drivers money.

When the Alberta government introduced legislation this spring intending to change how the province’s auto-insurance system handles injury claims, Finance Minister Nate Horner said the new setup would stabilize rates and make them more affordable while emphasizing a “care-first” approach that gives people hurt in an automobile accident “better access to the supports they need to recover.”

The new system is slated to start in January 2027 and replace the tort-based one, in which those injured in an accident can seek compensation through legal means. Instead of people suing drivers who cause crashes for compensation, insurers would pay compensation rates set by the province. Benefits for those injured in an auto crash would be available to everyone regardless of who caused it.

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Aaron Sutherland, the Insurance Bureau of Canada’s vice-president of the Western and Pacific regions, says the trade association understands the new system will give Albertans “the most generous benefits in the country,” something he calls “a good thing,” but that they’ll also “have a substantial ability to sue.”

“What it means for the price you’re going to pay, we’re still waiting on some of those details, but it’s hard to see savings if you’re going to have the most generous benefits and a significant ability to sue,” Sutherland told CTV News Edmonton on Wednesday. “That is going to have a price tag associated with it. What it specifically is, we don’t know that quite yet.”

In a statement Wednesday afternoon, the Office of Treasury Board and Finance told CTV News Edmonton the most significant increases affecting auto insurance “are associated with the rising costs of legal bodily injury claims, which are up 115 per cent since the original study was completed. Further increasing access to tort would limit savings for Albertans on car insurance.”

The office said that “increases in bodily injury claims, catastrophic weather events, tariffs and other inflationary pressures continue to negatively impact insurers’ costs, profitability and ultimately the costs Albertans have to pay,” but believes the care-first model will give residents “better, faster and more stable insurance.”

With files from CTV News Edmonton’s Connor Hogg