Starting January 1, 2027, Alberta will launch a new ‘Care-First’ auto insurance system designed to expedite payouts and provide better benefits for people involved in car accidents.
Putting Safety and Care First
The new system will hold at-fault drivers more accountable through higher premiums and litigation if found guilty of certain serious or criminal offences, such as drunk driving, fleeing law enforcement, or dangerous operation of a vehicle. Under the current system, not-at-fault drivers can sue in most circumstances – except for narrowly defined minor injuries – but often take years to resolve. Care-First applies funds that would have gone towards legal fees to more stable insurance and better benefit costs.
Highlights of the new care-first system include:
- Accessing benefits within within weeks, instead of months or years
- Seeing practitioners such as physiotherapists, psychologists, and chiropractors for an unlimited amount of time, when warranted
- Offering income replacement up to $125,000 per year until retirement
- Offering permanent impairment reimbursement up to $295,000
- Providing spousal support up to $600,000 in the event of a death
Will Fault Still Matter?
Yes. Under Care-First, each driver’s insurance company pays for their care, treatment, and other benefits, regardless of who caused the accident. However, at-fault drivers will continue to be held accountable through higher premiums and face necessary legal ramifications when applicable, including demerit points, loss of license, vehicle seizure, and even jail time.
For those involved in hit-and-run accidents or if the at-fault driver does not have insurance, Care-First benefits can be accessed under their own insurance policy and extends to any additional passengers in your vehicle. This also applies to injured cyclists and pedestrians, who in most cases will access benefits through the insurance policy of the vehicle from the collision.
The Motor Vehicle Accident Claims (MVAC) program will still be accessible to Albertans without insurance in the event of an injury.
The Cost of Claims
Bodily injury claims and their associated legal expenses are the single largest cost driver in Alberta auto insurance, with the average claim in 2024 totalling nearly $180,000. For cases where the injured person successfully sues, after lawyer fees and expenses – often 30% or more of the award – the settlement amount may not be enough to cover necessary care or treatments. These awards are set by the auto insurance policy and typically have a maximum of $1 million.
Instead of waiting for settlements or litigation, being able to access care and compensation quickly and easily will reduce the need to sue in order to access additional benefits, which may not be guaranteed.
The Future of Provincial Insurance
Alberta will be the second province to introduce a ‘care-first’ system, after Manitoba. Post-implementation, the benefits will be indexed annually for inflation in accordance with the Alberta Personal Income Tax Act. These are significant changes from how auto insurance currently operates in Alberta. If you have questions, talk to your Bulger broker before the new system comes into effect at the start of 2027.
