Alberta is launching a no-fault automobile insurance system designed to be privately delivered and care-focused. The province estimates the change will save the average driver C$400 annually, according to BestWire.
Policyholders will receive improved medical, rehabilitation, and income support benefits, while insurers are expected to see lower litigation costs.
Alberta Premier Danielle Smith stated that the new system aims to provide faster, more effective care while reducing rates for drivers.
The program will include lifetime treatment and care for victims of catastrophic injuries. Those with serious injuries will receive care until fully recovered.
At-fault drivers charged with a criminal offense, such as drunk or dangerous driving, or certain Traffic Safety Act violations, may still be sued for pain and suffering damages.
While long-term rate reductions are anticipated, the government noted premiums will rise initially.
Starting January 2025, the good driver rate cap will increase from 3.7% to 7.5% to address higher costs from legal fees, repairs, and natural disasters.
The Insurance Bureau of Canada supported the reforms but expressed concern about the continued rate cap. According to the IBC, the cap prevents premiums from reflecting actual costs, which could reduce consumer options and market competitiveness. It urged the Alberta government to lift the cap to sustain competition and maximize savings from the reforms.
Alberta lawmakers must pass legislation in spring 2025 to enable the system, which is expected to take full effect by January 2027. This timeline gives insurers time to adjust policies for the province’s 3.4 mn drivers.
In a related move, Ontario is also exploring auto insurance reforms. Proposed changes include making most accident benefits optional to lower costs and improve accessibility.
Ontario lawmakers are exploring a proposal to make most automobile insurance accident benefits optional, aiming to cut costs and improve policyholder accessibility.
According to proposed changes to the Insurance Act, medical/rehabilitation and attendant care benefits would remain mandatory.
The Ministry of Finance argues that making more benefits optional will increase insurance consumer choice.
The ministry highlights that current insurance packages lack flexibility, describing them as “one size fits all.” By offering tailored options, policyholders could reduce premiums by selecting only the coverage they need.
