Alberta's government said its planned Care-First auto insurance overhaul will deliver "significant consumer relief," releasing a new report that it claims supports promises of lower premiums under the forthcoming no-fault-style system.
Responding to the report, Aaron Sutherland (pictured), vice president for the Pacific and Western region at the Insurance Bureau of Canada (IBC), said the government "deserves tremendous credit for designing and delivering a best-in-class auto insurance system."
“By taking action to reduce legal costs, these reforms will put money back into the pockets of drivers while also providing the most generous care and benefits in the country to anyone injured in a collision,” Sutherland said, adding that Alberta’s insurers “look forward to working with the provincial government in the coming months to ensure a smooth transition to its Care-First system.”
The province plans to implement Care-First on Jan. 1, 2027, replacing the existing tort-based model with a regime that pays treatment and income benefits from a driver’s own insurer regardless of fault, while restricting lawsuits to a narrow set of serious offenses and out-of-pocket losses.
Under Care-First, bodily injury compensation will be centered on insurer-funded benefits rather than court-awarded damages. Benefits for medical treatment, rehabilitation and income replacement will be standardized and initially benchmarked to the levels available in Manitoba’s public no-fault system, according to provincial comparison documents.
The reform also creates an independent Alberta Automobile Care-First Tribunal to handle disputes over benefits and treatment decisions, shifting many conflicts out of the civil courts.
The government has repeatedly identified litigation costs as the single largest driver of auto insurance premiums in the province. Care-First is designed to contain those costs by sharply limiting the right to sue. Albertans injured in collisions will retain court access only in specific circumstances — such as when an at-fault driver is convicted of certain Criminal Code or Traffic Safety Act offenses — and to recover some out-of-pocket losses beyond what is covered in the benefit schedule.
For insurers, the model promises greater predictability in bodily injury claims and a shorter tail of large tort awards, in exchange for more front-loaded and generous care obligations.
While the new report highlights “significant” relief, earlier analyses suggest realized savings will depend heavily on how much litigation is permitted to remain in the system.
A government-commissioned feasibility study previously suggested Care-First could deliver roughly $400 in average annual premium savings per driver in a pure no-fault configuration, although that figure disappeared from later public documents as details around court access evolved.
Separate modeling by MNP, commissioned by IBC, found that retaining a limited right to sue at-fault drivers for serious offenses and excess losses could erode those savings by up to $136 per vehicle per year, compared with a stricter no-litigation model. IBC has warned that “the more lawyers are involved in Alberta’s Care-First system, the less likely that drivers will save,” and has urged the province to keep tort access “exceptional” rather than routine.
Critics from the plaintiffs’ bar and some consumer advocates argue the reforms will curtail injured people’s ability to obtain full compensation and shift power toward insurers and medical assessors. They have also questioned whether Care-First will achieve the premium reductions initially advertised, particularly given inflation in vehicle repair costs and parts.
The push to rework Alberta’s auto regime follows several years of rate freezes and caps that left many carriers arguing premiums were held below the cost of coverage, contributing to market exits and coverage restrictions. The province has also been dealing with elevated auto theft and severe-weather losses, further pressuring personal auto results.
Care-First, first announced in November 2024, is intended to stabilize the market by reducing volatility from bodily injury lawsuits and giving insurers clearer line of sight on future claim costs. The reform remains politically contentious, however. A resolution at the United Conservative Party’s 2025 annual general meeting called for repealing the no-fault legislation and returning to a fault-based system, a move Sutherland said at the time would be “quite concerning” for drivers hoping for a higher-quality product and more sustainable rates.
With implementation still nearly two years away, the latest report and IBC’s endorsement are part of an effort to keep the reform on track and reassure both consumers and markets that the promised relief is still achievable. For carriers, the next phase will involve digesting the detailed costing work—as seen in preliminary reform-costing studies filed with the Alberta Automobile Insurance Rate Board—and preparing pricing, product and systems for a 2027 launch that could materially change how auto risk is underwritten and how claims are managed in the province.
