New ‘Care-First’ Auto Insurance Coming to Alberta

Starting Jan. 1, 2027, Alberta is launching a new “care-first” auto insurance system. This system is designed to facilitate quicker payouts and better benefits for people involved in auto accidents.

Under the current system, not-at-fault drivers can sue in most circumstances, except for narrowly defined minor injuries. According to Alberta’s official website, this means claims can take years to resolve. What’s more, a payout is not guaranteed. And even if the suing driver does succeed, their payout can be massively reduced due to legal expenses.

The new care-first system will restrict lawsuits to when an at-fault driver is found guilty of certain serious offences, such as dangerous operation of a vehicle, drunk driving or fleeing law enforcement. The goal is to apply the money that would have gone toward legal fees to better benefits, affordability and long-term stability.

According to Alberta’s official website, the new system will:

• Focus on rapid deployment of benefits and treatment after an accident, within weeks
• Offer income replacement up to $125,000 per year until retirement
• Provide spousal support up to $600,000 if there’s a death
• Provide a permanent impairment benefit up to $295,000
• Offer unlimited medical coverage for life, when warranted
• Continue to hold at-fault drivers liable through higher premiums and litigation, for serious offences

Initially, benefits will be set at the levels in place in Manitoba, with the exception of the income replacement benefit: That will be set $5,000 greater than Manitoba’s due to higher average incomes in Alberta. Post-implementation, care-first benefits will be indexed annually for inflation as spelled out in the Alberta Personal Income Tax Act.

The new care-first system represents a significant change from the way auto insurance currently operates in Alberta. If you have any questions, talk to your broker before the changes take effect at the start of 2027.