Edmonton, Alberta – The Insurance Bureau of Canada is educating Alberta drivers about changes coming to the province’s auto insurance sector.
Last week, the IBC launched a website explaining the Care-First auto insurance system set to arrive province-wide in 2027.
The new system is designed to deliver faster medical treatment and income support to drivers who are injured in collisions, while simplifying the claims process and limiting unnecessary legal costs.
The new website, BetterAutoAlberta.ca, aims to provide clear information on how the new system will work, and why staff at the IBC are so pleased to see these reforms made.
Under the current model, Albertans are entitled to sue at-fault drivers for pain and suffering, loss of income and other damages. Because claims require court involvement, this means cases can take years to resolve. Medical treatment under this model is typically limited and maximum insurance benefits often expire before victims have fully recovered.
In contrast, the new model removes the need for most litigation by introducing a care-based approach. It ensures that treatment is provided as long as there is a measurable medical benefit, without arbitrary caps or time limits for serious or catastrophic injuries. A similar approach is used in Saskatchewan and Manitoba.
Compensation will shift from court-awarded damages to pre-determined benefit packages, including income replacement and a lump-sum permanent impairment payment for those with long-term injuries. For common injuries, the current system offers up to 21 pre-approved treatment visits and a maximum of just over $6,000 for pain and suffering. Under the new model, there will be no pain and suffering damages for minor injuries, but patients can access extended care if medically required and recover out-of-pocket expenses.
For more serious injuries, treatment under the existing system is capped at $50,000 over two years, after which an individual must sue the at-fault driver to continue care. Care-First eliminates these caps, providing treatment without maximums or strict timelines.
Compensation in the new model includes income replacement benefits and a permanent impairment lump sum ranging from $1,000 to $187,000, depending on injury severity. Catastrophic injury cases under the current system follow the same $50,000 treatment limit and require litigation for further compensation. Pain and suffering damages can reach up to $475,000 if awarded by a court. The new model replaces this with lifetime treatment coverage for injuries that warrant it, a maximum permanent impairment benefit of $295,000. It also provides additional supports like grief counseling and death benefits.
The government estimates the new system will save drivers an average of $400 per year once fully implemented by January 2027. The first phase of the transition will begin in January 2025, including adjustments to the good driver rate cap to a 7.5 percent increase, reflecting recent rises in legal, repair, and natural disaster-related costs.
Officials at the IBC are broadly in favour of the reforms. Last month, Aaron Sutherland, IBC's vice-president for Pacific and Western, described the new model as the "largest transformation of the auto insurance system in provincial history."
“Care-based auto insurance systems work by replacing costly legal battles with more efficient access to benefits and improved premiums, and the success of these reforms will be determined by the extent of litigation that the government permits," he said. "The more lawyers are involved in Alberta’s Care-First system, the less likely that drivers will save. Other provinces and international jurisdictions have recognized this and it is imperative that Alberta follows suit."
Sutherland also added that the system could benefit from further reforms. He called on the province to end its interventions on rates, cut red tape and rely more on market competition to improve affordability.
