Alberta's auto insurance system is changing on January 1, 2027. The new system, called Care-First Auto Insurance, will change how people receive medical care, financial support, and compensation after a car accident. The goal is to help injured people get the care they need faster while making auto insurance more affordable and stable.
But what does that actually mean for Alberta drivers? We've answered six common questions to help you understand what's changing, why it's happening, and what you need to know.
Auto insurance has become more expensive in Alberta, and the government wants to make the system more affordable. Rising vehicle repair costs, medical expenses, and injury claims have all contributed to higher insurance prices.
Under Alberta's current system, someone injured in a car accident may need to sue the driver responsible to receive additional compensation. These lawsuits are expensive and take years to settle, adding costs to the insurance system that can contribute to higher premiums for drivers.
The Alberta government believes that reducing legal costs and directing more money toward medical care will create a better system. Care-First is designed to help injured people recover faster while making insurance costs more predictable.
Care-First is Alberta's new system for handling injuries caused by car accidents. It begins on January 1, 2027, and will apply to eligible accidents that happen on or after that date.
The biggest change is how injured people receive benefits. Under the current system, drivers can access basic injury benefits through their insurance but may need to sue another driver for additional compensation. Under Care-First, eligible injured people will have access to expanded medical treatment, rehabilitation, and financial support without needing to sue.
This approach is sometimes called no-fault insurance. That doesn't mean nobody is responsible for an accident. It means people can receive eligible injury benefits regardless of who caused the collision. Drivers who cause accidents can still face higher insurance premiums.
Alberta will also continue using private insurance companies, meaning drivers can still shop around and choose their insurance provider.
Under Care-First, injured people will have access to expanded benefits designed to help them recover and manage the financial impact of an accident.
Some of the biggest changes include:
For example, imagine you're injured when another driver runs a red light. You break your leg, need several months of physiotherapy, and cannot work while you recover. Under the current system, you may receive basic injury benefits but need to pursue a lawsuit to recover additional losses. Under Care-First, you could receive expanded medical treatment and income replacement directly through the insurance system, depending on your eligibility.
The goal is to help injured people focus on recovery rather than waiting for a legal settlement.
In most cases, Care-First will remove the ability to sue another driver for injuries caused by a car accident. Instead, injured people will receive the medical care and financial benefits they qualify for through the insurance system.
There are exceptions. For example, a lawsuit may still be allowed if the at-fault driver is convicted of certain serious driving offences, such as impaired or dangerous driving. Some lawsuits may also be permitted for specific losses that are not covered by the new benefits.
This is one of the biggest trade-offs of Care-First. Although injured people will generally have access to more benefits, they will also have fewer opportunities to seek additional compensation through the courts.
Possibly, but lower insurance premiums are not guaranteed. One of the government's main goals is to make auto insurance more affordable by reducing the legal costs associated with injury claims. The government expects these savings to help fund expanded benefits and support more stable insurance prices.
However, your individual premium will still depend on factors like your driving history, vehicle, location, and coverage. Alberta is also introducing updated limits on certain insurance rate increases in 2027, but those limits have eligibility requirements and exceptions.
While Care-First is intended to improve affordability over time, it does not mean everyone's insurance bill will go down.
No. You do not need to make any changes to your auto insurance policy just because Care-First is starting. The new injury benefits will apply to eligible accidents beginning January 1, 2027, even if your existing policy renews later in the year. Your insurance policy will automatically switch to the care-first system.
However, Care-First mainly changes how injuries are handled. Your existing vehicle coverage, including collision and comprehensive insurance, will still matter. For example, if you cause an accident that damages your own vehicle, you will generally still need collision coverage to have your insurer pay for the repairs.
It's always a good idea to review your policy with your insurance broker to make sure you have the protection you need.
Care-First is one of the biggest changes to Alberta auto insurance in years. Starting January 1, 2027, the system will focus on providing expanded medical care, better financial support, and less reliance on lawsuits after car accidents. The government hopes these changes will also make insurance more affordable over time.
For most drivers, there is nothing they need to do before the new system begins. The most important thing to remember is that Care-First changes how people are cared for after an accident. It doesn't mean nobody is at fault, every type of damage is covered, or insurance premiums will automatically decrease.
Have questions about your coverage? The team at Armour Insurance is here to help you understand your options.
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