Insurance Implications: Panel suggests Alberta moves to no-fault insurance model

Edmonton, Alberta ⁠— A government panel is recommending a fundamental overhaul of Albertan auto insurance, suggesting the province moves toward a no-fault model.

Chris Daniel, who heads the government-appointed Automobile Insurance Advisory Committee, says the change is critical if auto insurance is to remain sustainable while providing fair and timely care and compensation to those hurt in collisions⁠.

“The committee concluded that due to poor health outcomes and continuous price instability resulting from the current Alberta model, it must be fundamentally reformed to properly serve the interests of traffic injured and insured motorists alike,” he said.

The committee shared its 37 recommendations in a 536-page report published last week, CBC News reported. According to the report, the average Alberta consumer with full insurance coverage would see a 9.4 percent reduction in premiums if the provincial government makes the switch to no-fault.

To make the switch, the Alberta government will have to establish an independent traffic injury regulator to both handle claims and assess which benefits injured individuals should receive. This regulator would then be funded by both the government and the insurance industry.

Finance Minister Travis Toews said the government wants to hear more from Albertans, health professionals and the insurance industry before committing to change.

“The committee made a compelling recommendation,” said Toews. “It would result in transformational change in terms of our automobile insurance system in the province, and we really believe we want to hear from Albertans.”

Toews said a panel will be struck to get feedback on the no-fault proposal by the middle of next year.

Meanwhile, lawyers and other stakeholder groups in the province are telling the Alberta government not to act on the recommendation. 

The insurance industry claims it is losing money when it comes to auto insurance, with payouts and costs totalling greater numbers than what is made in premiums. Keith McLauhlin, a spokesperson for the Fair Alberta coalition of lawyers, medical professionals and injury rights activists said insurance companies need to open up their books to provide evidence back to these claims. 

Recommendations to switch Alberta’s insurance model to a no-fault system follow British Columbia’s decision to go through with its own transition under its elected NDP government. 

The plan to have the Insurance Corporation of British Columbia offer mandatory Basic Vehicle Damage coverage has already convinced at least one private insurer⁠—Intact Insurance⁠—to withdraw from BC’s optional auto coverage market.

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One Response

  1. Why would insurance companies continue to operate and provide insurance if they were actually losing money? I think more substantial evidence would need to be provided for that claim to be accepted as proof. More likely…they are not making as much money as they want to.

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