Alberta's average full-coverage auto insurance premium increased 8.7% to $1,903 in 2026 due to significantly higher collision repair costs, though the new Care-First system launching January 1, 2027, is projected to reduce premiums by an average of 13.7% or $297 per vehicle.
- Average Alberta auto insurance premium rose 8.7% to $1,903 in 2026, up from $1,751 in 2024
- Collision claim frequency fell 7.4% between 2021-2025, but average cost per claim increased 46.9%
- Electric vehicles had the highest collision claim costs at $15,353 average, compared to $9,526 for non-EVs
- The new Care-First system launching January 1, 2027, is projected to reduce premiums by an average of 13.7% or $297 per vehicle
- Young drivers are expected to receive some of the largest savings at approximately 30%, while motorcyclists face a 100.1% increase
Alberta’s average full-coverage auto insurance premium has climbed 8.7% to $1,903 while collision claims have become substantially more expensive since 2021.
The average premium increased from $1,751 in 2024, according to the Automobile Insurance Rate Board’s 2026 Market and Trends Report. The five-year increase reached 20.6%.
Collision claim frequency fell 7.4% between 2021 and 2025. However, the average cost per claim rose 46.9% over the same period. That combination points to fewer but more expensive collision claims.
Newer safety systems can prevent some low-speed crashes. However, those systems can also increase diagnostic complexity and repair costs when a collision occurs.
Electric vehicles had the highest average collision claim cost in 2025. The average was $15,353 for an EV, compared with $12,005 for a hybrid and $9,526 for a non-EV.
Vehicle value explains part of the difference. The average depreciated value was $75,296 for an EV, $53,725 for a hybrid and $29,281 for a non-EV. EVs and hybrids also recorded lower collision frequencies than conventional vehicles.
Comprehensive claim costs returned closer to normal following the Calgary hailstorm in 2024. Alberta’s total loss cost across all coverages fell from $1,731 per vehicle in 2024 to $1,591 in 2025.
The private passenger vehicle loss ratio declined from 98.9% to 83.6%. That means insurers paid about 84 cents in claims for every premium dollar collected. Staffing, commissions and other expenses added approximately another 27 cents per dollar.
Combining the 83.6% loss ratio with the estimated 27% expense ratio produces a combined ratio of approximately 111%. A separate calculation under the regulator’s excess profit methodology placed the industry’s return on premium at -8.8%. Twenty-one insurers recorded a negative return. Two reported a positive return.
The 2025 loss ratio remained above the 70% level used as the industry benchmark for profitability. It was also higher than Ontario’s 66% loss ratio.
Access to collision coverage has also become a concern. Some insurers began denying optional collision and comprehensive coverage to drivers with an at-fault claim or serious conviction. Others required deductibles of $2,000 or more.
Collision coverage was purchased by 67.7% of drivers with an at-fault claim, major or criminal conviction, or other characteristics associated with coverage restrictions. The rate was 73.2% among drivers without those factors.
The average collision deductible was $870. Drivers in the higher-risk group had an average deductible of $1,054, compared with $848 for other drivers.
Regulatory changes introduced in October 2025 gave the AIRB authority to review underwriting rules governing access to optional coverage. In early 2026, further rate increases were made conditional on insurers removing the restrictions. Many insurers have since expanded access to collision and comprehensive coverage.
The province will replace its current court-based injury compensation system with Care-First on Jan. 1, 2027. The new system will provide expanded medical, rehabilitation and income-replacement benefits while reducing the role of bodily injury lawsuits.
A separate Care-First Consumer Premium Impact Report covers 34 approved rate filings representing 3.13 million private passenger vehicles. The projected average reduction is 13.7%, or $297 per vehicle.
Premiums are projected to fall for 88.2% of those vehicles. Another 9.8% are projected to receive increases, while 2% are expected to see no change. Individual results will depend on the insurer, vehicle, driving history, coverage and other rating factors.
The projected savings do not reflect lower collision or comprehensive costs. Insurers were not permitted to change those coverages through their Care-First implementation filings. The projected reductions come from changes to bodily injury, accident benefits and underinsured motorist coverage.
Young drivers are expected to receive some of the largest reductions. A standardized young male profile carries a projected reduction of $3,094, or 30%. The middle-aged male and female profiles carry projected reductions of approximately $525, or 14%.
Motorcyclists are a major exception. The projected average increase for motorcycles and mopeds is 100.1%, or $445. The change reflects the higher cost of providing enhanced medical, rehabilitation and income-replacement benefits following serious motorcycle injuries.
The combined commercial and interurban category carries a projected average reduction of 3.1%, or $56. Results vary within the category, depending on the vehicle and where it operates.
“This updated analysis confirms that Care-First will deliver meaningful savings for Alberta drivers at a time when they need it most,” said Aaron Sutherland, vice-president, Pacific and Western, Insurance Bureau of Canada.
Sutherland placed the average projected saving at about $300, or nearly 15%. An earlier actuarial analysis completed by Oliver Wyman had projected average savings of $259.
