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, CBC News has learned. Auto insurance industry sources with knowledge about the changes said to CBC News on Monday 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. If these changes are made, they would become the largest reform in decades to auto insurance in Alberta. While Alberta has some of the priciest auto insurance in Canada by some measures, drivers would likely have to pay more for it in the shorter term once the changes are made. Insurance companies have been lobbying for easing the rate cap to allow them to charge more money to address their rising costs. Because of these pressures, some smaller insurance companies have left Alberta, and Treasury Board President and Finance Minister Nate Horner has predicted others might copy them. The Alberta government said in 2023 it will be implementing reforms to address high auto insurance rates as it explores long-term solutions..UPDATED: Alberta government reforms auto insurance system .“We know that Albertans have been struggling with their auto insurance rates and that’s why we’ve been working hard to find solutions,” said Alberta Premier Danielle Smith. “I’m pleased that we can work to bring forward these new measures to help.”While the Alberta government had suspected the reforms would be fine, Horner acknowledged the rate cap was unsustainable and could not last indefinitely. Although CBC News could not confirm the percentage for the larger rate cap scheduled for 2025, two sources said they understand cabinet spoke about doubling it to allow 7.5% increases. Alberta Treasury Board and Finance press secretary Justin Brattinga confirmed the reforms are coming after lengthy consultations, but he would not provide any details. “Our focus is on reducing premium costs for Albertans and ensuring that they receive faster and better care following an accident,” said Brattinga to CBC News. The sources said Horner would make the announcement on Thursday. In recent years, the Alberta government has made affordability a top priority. Some of the programs it has introduced are $100 per month inflation relief cheques and electricity reforms brought in by Alberta Affordability and Utilities Minister Nathan Neudorf. Under the upcoming insurance changes, the Alberta government will be announcing pricier premiums at first, with larger reductions coming later on. However, the insurance industry might say a higher rate cap would not work. This is because insurers lack financial stability after years of rising costs for injuries, vehicle repairs, and lawsuits and government-imposed price controls. Personal injury lawyers would likely be more opposed to no-fault insurance, as reports indicate it would wipe out the number of claims they get and positions in their law firms.“Obviously we're nervous,” said Edmonton lawyer Norm Assiff to CBC News.“This is the only issue to me, because I have a staff of 30 people.”
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, CBC News has learned. Auto insurance industry sources with knowledge about the changes said to CBC News on Monday 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. If these changes are made, they would become the largest reform in decades to auto insurance in Alberta. While Alberta has some of the priciest auto insurance in Canada by some measures, drivers would likely have to pay more for it in the shorter term once the changes are made. Insurance companies have been lobbying for easing the rate cap to allow them to charge more money to address their rising costs. Because of these pressures, some smaller insurance companies have left Alberta, and Treasury Board President and Finance Minister Nate Horner has predicted others might copy them. The Alberta government said in 2023 it will be implementing reforms to address high auto insurance rates as it explores long-term solutions..UPDATED: Alberta government reforms auto insurance system .“We know that Albertans have been struggling with their auto insurance rates and that’s why we’ve been working hard to find solutions,” said Alberta Premier Danielle Smith. “I’m pleased that we can work to bring forward these new measures to help.”While the Alberta government had suspected the reforms would be fine, Horner acknowledged the rate cap was unsustainable and could not last indefinitely. Although CBC News could not confirm the percentage for the larger rate cap scheduled for 2025, two sources said they understand cabinet spoke about doubling it to allow 7.5% increases. Alberta Treasury Board and Finance press secretary Justin Brattinga confirmed the reforms are coming after lengthy consultations, but he would not provide any details. “Our focus is on reducing premium costs for Albertans and ensuring that they receive faster and better care following an accident,” said Brattinga to CBC News. The sources said Horner would make the announcement on Thursday. In recent years, the Alberta government has made affordability a top priority. Some of the programs it has introduced are $100 per month inflation relief cheques and electricity reforms brought in by Alberta Affordability and Utilities Minister Nathan Neudorf. Under the upcoming insurance changes, the Alberta government will be announcing pricier premiums at first, with larger reductions coming later on. However, the insurance industry might say a higher rate cap would not work. This is because insurers lack financial stability after years of rising costs for injuries, vehicle repairs, and lawsuits and government-imposed price controls. Personal injury lawyers would likely be more opposed to no-fault insurance, as reports indicate it would wipe out the number of claims they get and positions in their law firms.“Obviously we're nervous,” said Edmonton lawyer Norm Assiff to CBC News.“This is the only issue to me, because I have a staff of 30 people.”
