We are improving Alberta’s auto insurance system to provide long-term sustainability for industry and optimal insurance options at reasonable prices for consumers. This work will be completed in a series of short, medium and long-term measures.

Alberta’s current auto insurance system is no longer working. Costs associated with bodily injury claims are escalating at a pace that far exceeds inflation, resulting in continuing increases to driver premiums.

To provide immediate relief, we are taking action to stabilize auto insurance costs and improve medical benefits for Albertans injured in collisions – potentially leading to cost savings for drivers.

An expert committee independently reviewed Alberta’s auto insurance system in 2020 and provided recommendations that have informed these important steps.

Short-term measures

Our immediate actions focus on making rates more affordable, improving care and expanding options, like pay-as-you-go and usage-based insurance.

These measures require making changes to legislation, regulations and the Automobile Insurance Rate Board (AIRB).

Legislation changes

Bill 41 received royal assent on December 9, 2020 to update the Insurance Act. The following changes will come into effect in stages by early 2022:

  • limit the number of experts involved in traffic injury lawsuits to save money and speed up resolution
  • make the pre-judgement interest rate on pain and suffering damages a floating rate that begins to accumulate when written notice of an injury claim is given to an insurer or when a Statement of Claim is served
  • enable direct compensation for property damage to:
    • allow not-at-fault drivers to call their own insurer to cover car repairs
    • eliminate red tape between insurers and reduce costs incurred for pursuing damages from third-parties

Regulation changes

Regulation updates come into effect November 1, 2020 for most changes, and January 1, 2021 for the remainder. Updated regulations will include:

  • Minor Injury Regulation
  • Diagnostic and Treatment Protocols Regulation
  • Automobile Accident Insurance Benefits Regulation
  • Automobile Insurance Premiums Regulation

Making rates more affordable

Measures to address affordability by containing cost-pressures associated with bodily injury claims:

  • revised definition of “minor injury” to include more injuries that do not have a permanent negative or life-altering impact for injured individuals
  • improved injury dispute resolution processes
    • For example, designating dentists as certified examiners to improve the evaluation of jaw-related injuries and help resolve disputes.

Improving care

Measures to improve care for Albertans by increasing coverage for diagnostic and treatment services and enhancing benefits included in mandatory auto insurance:

  • designated more types of health professionals as able to deal with traffic injuries, on referral by a primary care practitioner, such as psychologists, dentists and occupational therapists
  • included inflation-adjusted funeral benefits, grief counselling benefits and income replacement benefits
  • enhanced the patient referral process and better defines a “treatment visit”
  • improved clarity on coverage for medical equipment, home modifications and vehicle modifications

Providing more choice for drivers

Measures to support insurers in providing more choice in insurance products:

  • enable innovative insurance options such as pay-per-kilometre
  • allow insurers greater flexibility in applying Usage Based Insurance (UBI)
    • For example, insurers would be able to use UBI to set overall premiums in addition to current discounting purposes.

Automobile Insurance Rate Board (AIRB) changes

The role authority of the AIRB will be expanded to provide full authority over elements such as insurer rating factors and rating programs, helping it to respond better to consumer and industry needs, modernize Alberta’s system for setting insurance premiums and the authority to establish guidelines and rules followed by industry.

Long-term measures

We will continue working on long-term comprehensive auto insurance reforms to ensure a fair and sustainable system for drivers and insurers.

Albertans and stakeholders will have the opportunity to share feedback on auto insurance reform throughout the process. More information will be provided when feedback opportunities are available.