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A better auto insurance system
Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans, while providing more affordable and sustainable auto insurance.
The new care-first system will focus on providing improved medical, rehabilitation, and income support benefits for all Albertans injured in a collision, while continuing to hold at-fault drivers accountable through higher premiums. Albertans injured in a collision will be able to access these enhanced benefits without the need to sue.
The move to a care-first system was informed by feedback of more than 16,000 Albertans, along with consultations with auto insurance stakeholders.
Care-first
A care-first system will provide Alberta drivers with access to increased benefits for a reduced cost – focusing on getting the treatment they need faster.
Beginning on January 1, 2027, Alberta drivers will have:
Care-first comparisons
Below are tables showing the comparison between our current insurance system and the care-first system for common, serious and catastrophic injury treatment, compensation and timelines.
Common injury
Table 1. Current court system vs. the care-first system for common injury treatment, compensation and timelines.
| Court system (current) | Care-first system | |
|---|---|---|
| Treatment | Up to 21 pre-approved physiotherapy or chiropractic visits. | Treatment provided for as long as there is a 'measurable benefit'. |
| Compensation | Maximum of $6,061 for pain and suffering damages plus out-of-pocket expenses. | No pain and suffering damages, but out-of-pocket expenses can be claimed. |
| Timelines | Typically claim is resolved (treatment and compensation) within months. | Typically claim will be resolved (treatment and compensation) within months. |
Serious injury
Table 2. Court system vs. the care-first system for serious injury treatment, compensation and timelines.
| Court system (current) | Care-first system | |
|---|---|---|
| Treatment | Up to $50,000 for 2 years. If more treatment is required, must sue at-fault driver. | No maximum or time limit for treatment that provides a measurable benefit. |
| Compensation | Pain and suffering damages, as determined by the courts, loss of earning capacity, plus out-of-pocket expenses. | May be entitled to a permanent impairment lump sum (between $944 and $298,520), income replacement benefit, plus out-of-pocket expenses. |
| Timelines | Claims can take years to resolve. | Claims would be resolved when maximum medical recovery is achieved. |
Catastrophic injury
Table 3. Court system vs. the care-first system for catastrophic injury treatment, compensation and timelines.
| Court system (current) | Care-first system | |
|---|---|---|
| Treatment | Up to $50,000 for 2 years. If more treatment is required, must sue at-fault driver. | No maximum or time limit for treatment that provides a measurable benefit. Ancillary supports for the rest of their life, if needed. |
| Compensation | Pain and suffering damages may be determined by the courts. A previous Supreme Court of Canada decision established maximum amount. Loss of earning capacity, plus out-of-pocket expenses. | May be entitled to a permanent impairment lump sum (maximum is similar to the Supreme Court of Canada limit after removing legal costs), income replacement benefit, plus out-of-pocket expenses. |
| Timelines | Claims can take years to resolve. | Would receive treatment and care for the rest of their life, if needed. |
Rate cap
Alberta’s government is committed to helping drivers manage their rising insurance premiums.
To support good drivers, rates for those who qualify are capped at 7.5% in 2025 and 2026. To be eligible for the rate cap, drivers will need to have no minor traffic convictions within the past 3 years, in addition to meeting existing criteria.
Rate increases for good drivers are capped at 5% per year, and an additional 2.5% rate rider accounts for natural disaster-related costs, such as storms and hail damage in Calgary and Brooks in 2025.
This means good drivers’ rates are capped at 7.5% in 2025 and 2026.
The Automobile Insurance Rate Board is further limited from approving a rate change greater than an average of 12.5% for all their policy holders, up from the previous of 10%. The limit controls how much premiums can rise overall, making sure companies keep overall policy costs in check.
Under the rate cap, a good driver is anyone who does not have any of the following:
- An at-fault accident in the last 6 years
- A criminal code traffic conviction in the last 4 years
- A major traffic conviction in the last 3 years
- A minor traffic conviction in the last 3 years
The determination of whether a driver is eligible for the good driver rate cap is made on their insurance policy renewal date.
How we got here
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Bill 47 - Automobile Insurance Act
In March 2025, Alberta’s government proposed legislation to support the implementation of the care-first auto insurance system and establish a framework for improved access to health and medical benefits for Albertans injured in vehicle collisions.
Read about Bill 47, the proposed Automobile Insurance Act.
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Auto insurance engagement
Albertans shared input in 2024 to help inform government actions to make auto insurance more affordable, stable and sustainable.
Learn more about the auto insurance engagement.
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Independent review
The increasing cost of repairs, parts shortages and rising auto thefts are all driving up insurance rates across Canada. But the single biggest reason for the increase in rates in Alberta is the increasing costs of personal injury claims.
Alberta’s government asked independent experts to look at systems that could reduce the costs of auto insurance and improve the sustainability and stability of the insurance system.
Oliver Wyman, the Automobile Insurance Rate Board’s actuary, focused its work on comparing average premiums under different existing auto insurance systems, largely across Canada. The Nous Group, an internationally renowned economist group, examined the broader costs and benefits of these different auto insurance models.
Read the report: Auto Insurance Changes in Alberta (includes the Oliver Wyman and Nous Group studies)
Previous reforms
Get the best rate
There are steps you can take to make sure you get the best auto insurance rates.
Alberta’s Automobile Insurance Rate Board also has more information on getting the best auto insurance rates: shopping guide for auto insurance and rate comparison tool.
News
- Better, faster, cheaper auto insurance (March 24, 2025)
- Communicating better, faster, affordable auto insurance | Mieux communiquer : une assurance automobile améliorée, plus rapide et abordable (November 25, 2024)
- Better, faster, more affordable auto insurance | Une assurance automobile meilleure, plus rapide et plus abordable (November 21, 2024)
- Have your say on auto insurance (April 26, 2024)
- Good drivers to benefit from auto insurance changes (November 1, 2023)
- Taking action on insurance (January 26, 2023)
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