UPDATED: Alberta government to implement new private, care-focused auto insurance model

The Alberta government will be introducing a new auto insurance system to what it says will provide better, faster services to Albertans while reducing premiums. After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, the Alberta government said it will be introducing a new privately-delivered, care-focused system. “Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable,” said Alberta Premier Danielle Smith in a Thursday press release.“When it’s implemented, our new privately-delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”Right now, the Alberta government said auto insurance in the province is unaffordable and lacks care. Once fully implemented, it said the auto insurance system will deliver better, faster care for people involved in collisions, and Albertans will see cost savings of up to $400 per year. “High auto insurance rates put strain on Albertans,” said Alberta Treasury Board President and Finance Minister Nate Horner. “By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”Currently, Albertans who suffer injuries because of collisions wait months for simple cases to be resolved and can wait years for those related to more serious, life-changing injuries to be addressed. Additionally, the medical and financial benefits they receive often expire before they have recovered. Under the new system, the Alberta government said Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. It said those who sustain serious injuries will receive treatment until they are fully recovered.These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence such as impaired or dangerous driving or convicted of certain offences under the Traffic Safety Act.It confirmed work on the new auto insurance system will require legislation in spring 2025. To reconfigure auto insurance policies for 3.4 million Albertans, it said companies need time to create and implement the new system. It expects the new system to be fully implemented by 2027. In the interim, it said the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs effective January, increasing vehicle damage repair and natural disaster costs. It added this protects good drivers from significant rate increases and ensures auto insurance providers remain financially viable in Alberta.At the moment, it noted Albertans have been clear they want premiums to be based on risk. Because of this, bad drivers will continue to pay higher premiums than good ones. By providing enhanced medical, rehabilitation and income support benefits, it said this system supports Albertans injured in collisions and reduces the impact of litigation costs on the amount Albertans pay for their insurance.Alberta Affordability and Utilities Minister Nathan Neudorf called keeping more money in Albertans’ pockets “one of the best ways to address the rising cost of living.”“This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province,” said Neudorf. Smith followed up by saying public auto insurance was one of the options the Alberta government had on the table and did a consultation on it.“So the industry should take that seriously that we did look at,” she said. “We knew what the cost would be, we knew what the implementation schedule would be.” However, she said it has been given assurances its approach will address the issues it has been trying to. While it did consult on public auto insurance, she admitted she wants to give this option the benefit of the doubt of trying it out so it does not have too long a delay before giving relief. Alberta NDP MLA Court Ellingson (Calgary-Foothills) responded by saying Albertans are paying some of the highest auto insurance rates in Canada. “Instead of stepping up and finding ways to give people real financial relief, the UCP is letting rates climb even higher — exactly when Albertans can least afford it,” said Ellingson. “Currently, rate increases for good drivers are capped at 3.7%.” The Alberta government wants to raise this to 7.5%, doubling the allowable rate increase. At a time when Albertans are experiencing high inflation and unemployment and the lowest minimum wage in Canada, Ellingson said it continues to make life harder. CBC News learned on Monday the Alberta government will be saying this week it will enable auto insurance companies to raise premiums by the more than 3.7% rate cap it enacted and bring about more savings later on by removing personal injury lawsuits and legal claims from the system..Alberta government to lift auto insurance rate cap, end right to sue in crashes .Auto insurance industry sources with knowledge about the changes said the Alberta cabinet has endorsed changing the province's insurance system to a mostly no-fault one.Under a no-fault insurance system, accident victims lose the right to sue the drivers who caused them. To compensate victims, insurance companies pay out injury benefits based on predetermined guidelines.

UPDATED: Alberta government to implement new private, care-focused auto insurance model

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