Auto insurance changes would limit litigation, put ‘care first’

Under new auto insurance legislation in Alberta, people won't be able to sue a driver who causes a crash.

The Alberta government has introduced a bill that aims to change how the province’s auto-insurance system handles injury claims to try to reduce rates.

On Monday, Finance Minister Nate Horner brought forth Bill 47, the Automobile Insurance Act, saying it will stabilize rates and make them more affordable while emphasizing a “care first” approach that gives people hurt in an automobile accident “better access to the supports they need to recover.”

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“You’re basically taking 20 per cent of the cost out of the system, and that’s going to be given back to the system through increased benefits and access to health care and savings,” Horner told media.

“Some combination of where exactly that lands we’ll have to see, but we’re confident that with what we see in other jurisdictions all around us, the savings will be there.”

Alberta would be the first province in Canada to adopt a privately delivered, care-first insurance system, Horner said.

If passed, the new system would be put in place in January 2027 and replace the tort-based one, in which those injured in an accident can seek compensation through legal means. Instead of people suing drivers who cause crashes for compensation, insurers would pay compensation rates set by the province.

And benefits for those injured in an auto crash would be available to everyone regardless who caused it.

Horner said at-fault drivers would still be held accountable under the new system.

“Fault still matters,” Horner said. “The system will still ensure bad drivers are held accountable through higher premiums. Albertans will still be able to sue an at-fault driver (under) certain circumstances.

“We have to make sure such circumstances are reasonable since lawsuits are driving increases in auto insurance.”

Horner said costs of litigations exceed $1.2 billion a year.