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Alberta approves no-fault auto insurance amid public & legal pushback

Alberta approves no-fault auto insurance amid public & legal pushback

Alberta lawmakers have passed legislation to introduce a privately operated no-fault auto insurance model, focusing on a “care first” approach, according to the Insurance Bureau of Canada (IBC).

Supporters, including insurers, argue that this model will cut down on legal expenses and speed up compensation for accident victims.

Critics, however, believe it will raise insurance costs and take away the legal rights of consumers.

A version of the bill appeared late last year. Lawmakers estimated that the average driver could eventually save about C$400 annually.

The Alberta government confirmed that while the law is expected to lower rates in the long run, premiums may go up at first.

Bill 47 received royal assent on May 15, completing the legislative process. The government, however, still needs to finalize the regulations before the law takes effect in January 2027.

Once in place, the system will offer better medical, rehab, and income benefits. It will provide lifetime treatment for people with catastrophic injuries and full recovery coverage for those with serious injuries, the province said.

Alberta is in its third year of a government-imposed rate cap. Insurers now pay out $1.17 in claims and expenses for every $1 they collect in premiums.

The IBC said the cap cannot continue and has caused insurers to leave the market, making it harder for people to get coverage.

To keep the new system affordable, lawmakers must limit legal action and ensure the benefits remain balanced, said Aaron Sutherland, IBC’s vice president for Pacific and Western.

More lawyers involved means less savings for drivers. The province must stay focused on cutting excessive legal costs.

Aaron Sutherland, IBC’s vice president

The Canadian Bar Association’s Alberta branch criticized the new law. It said the government did not include enough public or legal input.

“Albertans told us they care about fairness, accountability, and access to justice,” said CBA Alberta President Robert D.L. Bassett. “These values should have shaped this law.”

CBA Alberta said 80% of Albertans do not believe the no-fault system will cut costs. Three-quarters want to keep the right to sue, and 82% think people should be financially responsible for the accidents they cause.

Although disappointed, CBA Alberta said it plans to work with lawmakers to improve the final rules in the coming months.