As of 2027, new legalities will come into play in Alberta. The province has operated under a traditional “fault-based” insurance system for years, often leading to protracted legal battles and significant stress for those involved.
In a monumental shift aimed at streamlining claims, providing swifter access to benefits, and ultimately reducing premiums, the Alberta government has passed Bill 47, the Automobile Insurance Act, to implement what is being called a “Care-First” auto insurance system.
What does this mean for you? How will this affect how car accident cases are handled? Let’s demystify this evolving landscape by offering you key insights into how the new no-fault system will operate.
Examining the Shift from Fault Insurance
To fully appreciate the innovations of Alberta’s fast-approaching “Care-First” system, we must briefly discuss its predecessor, at-fault insurance, which Alberta currently follows until the changes kick in.
Fault insurance provides coverage for damages caused by the insured party’s actions. Thus, if you are involved in an accident governed by a fault-based insurance system, the primary focus is on determining which driver was at fault. The party deemed responsible for the accident is held liable for the damages, and their insurance company must pay for the injuries and property damage sustained by the innocent party.
As you can see, this system is fundamentally based on the principle of accountability. The negligent party bears the financial responsibility for the consequences of their actions, often through court-ordered damages for pain and suffering, lost wages, and medical expenses.
The “Care-First” no-fault insurance system is distinctly different from a pure fault insurance system because it provides coverage for certain benefits regardless of who was at fault for the accident, while also reducing the need for litigation.
Introduction to Alberta’s Auto Insurance System and the Shift
Alberta’s move to a “Care-First” system represents a fundamental re-imagining of how motor vehicle accident claims are handled. Prior to the move, to receive compensation for injuries or damages, an individual typically must prove that another driver was at fault for the collision. This often led to lengthy investigations, contentious disputes over liability, and delayed access to much-needed medical treatment and financial support.
In contrast, as of January 1, 2027, injured individuals can claim compensation through their own insurance company, regardless of who was at fault for the accident. This critical change comes with certain benefits.
The new no-fault system is designed to:
- Simplify the claims process: There will be limited rights to sue the other party. Rather, time and effort can be saved on determining fault since accident victims can go straight to their own insurance providers to file claims for damages.
- Expedite the delivery of benefits: By avoiding long, drawn-out fault deliberations and court proceedings, you may receive your damages faster and with less hassle.
- Reduce the overall costs associated with auto insurance: The Alberta government has stated that auto insurance premiums will be reduced for good drivers, with estimated premium savings of an average of $400 each year once the system is fully implemented. This reduction is anticipated to stem from several factors, including significantly reduced legal costs, more efficient claims processing, and a decrease in protracted litigation.
Overall, this shift will ensure that Albertans receive the care they need when they need it. However, keep in mind that you may still find yourself going head-to-head with your own insurance company, regardless of the fault system governing your case. At times like these, you should consult a personal injury lawyer to make sure you get the full amount of compensation you’re entitled to receive.
How “Care-First” No-Fault Insurance Works
The defining characteristic of “Care-First” no-fault insurance is that each party’s own insurance company will cover their vehicle damage and medical treatment, irrespective of whoever caused the collision. This shift aims to eliminate the often contentious and time-consuming process of determining fault as the primary gateway to receiving benefits for injuries and vehicle repairs.
The “Care-First” system largely eliminates the immediate need to sue the at-fault party for personal injury benefits and property damage. In turn, legal costs are reduced, and the claims process is streamlined.
Rather, if you are injured in an accident, you will pursue compensation directly through your own insurer. You will not have to prove fault or navigate a lengthy court process to access basic medical treatment, income replacement, or compensation for vehicle repairs. You will be able to focus on recovery sooner rather than later.
At-Fault Drivers and Limitations on Liability
A common misconception about no-fault insurance is that it entirely eliminates the concept of being at fault, but this is not the case. While the “Care-First” system streamlines the process of accessing benefits for vehicle damage and personal injuries, at-fault drivers may still be held accountable for their actions.
The “Care-First” system does not eradicate the concept of fault as it pertains to responsibility and consequences for negligent or wrongful conduct. While your own insurer will cover your immediate damages and medical treatment, the at-fault driver’s actions can still lead to higher premiums for him or her.
More significantly, the Automobile Insurance Act significantly restricts the ability to sue the at-fault party. Under the new system, individuals generally cannot sue the at-fault driver for “pain and suffering” or other non-pecuniary damages, with limited exceptions.
However, there are specific circumstances where the right to sue for certain damages remains:
- Criminal code offences: If the at-fault driver is convicted of a serious offence under the Criminal Code of Canada (e.g., impaired driving, dangerous driving causing bodily harm)
- Traffic Safety Act offences: If the at-fault driver is convicted of certain prescribed offences under the Traffic Safety Act
- Exceeding insurance coverage: If your out-of-pocket expenses (pecuniary losses) for things like medical treatment, lost wages, or future care needs exceed the maximum amounts provided under your own insurance policy
- Catastrophic injuries: The right to sue for non-pecuniary damages may be retained for those who suffer truly catastrophic injuries
The new no-fault system aims to strike a balance. It both provides an efficient way for injury victims to seek compensation and maintains a framework where individuals are accountable for egregious driving behaviour.
Fair Compensation for Injury Victims
One of the most compelling arguments for the “Care-First” insurance system is its commitment to providing fair compensation for injury victims, regardless of who was at fault for the accident. The time and stress associated with obtaining essential benefits are thus reduced.
The system is designed to provide a comprehensive range of benefits to support recovery, including:
- Enhanced medical and rehabilitation benefits: Significantly increased coverage for necessary medical care, rehabilitation, and therapies, potentially with no maximum or time limit for treatment that provides a measurable benefit, and lifelong care for catastrophic injuries
- Increased income support: Enhanced benefits for lost wages due to inability to work following an accident, up to 90 percent of net income to a maximum of $120,000 gross annual income, payable until age 65
- Compensation for property damage: Coverage for repairs or replacement of damaged vehicles, primarily through Direct Compensation for Property Damage (DCPD)
- Permanent impairment benefit: For assessed permanent impairments or catastrophic injuries arising from a motor vehicle accident, a lump sum payment may be available
To address potential disputes regarding benefits, the Automobile Insurance Act establishes the Alberta Automobile Care-First Tribunal, through which Albertans can dispute care and treatment decisions made by their insurance company. While its purpose is to keep disputes out of court, individuals still have the right to a free consultation with law firms like Grover Law Firm to understand their rights and entitlements and ensure they receive the full compensation they are due under the new system.
The Role of Direct Compensation for Property Damage (DCPD)
Alberta’s no-fault insurance system works well with the already-established Direct Compensation for Property Damage (DCPD) automobile insurance reform. DCPD allows for prompt and efficient compensation to be provided for vehicle damage, significantly simplifying the process for affected drivers.
Under DCPD, if your vehicle is damaged in a collision that is not your fault, your own insurance company will cover the cost of your repairs. This means you do not have to pursue the at-fault driver’s insurance company to get your vehicle fixed.
Instead, your insurer directly compensates you for the damage, based on the percentage of fault assigned to each driver. If another driver is 100 percent at fault, your insurer pays 100 percent of your damages. If you are 50 percent at fault, then your insurer pays only 50 percent.
Talk to Grover Injury Law About the New No-Fault Insurance System
Alberta’s transition to the “Care-First” auto insurance system marks a significant evolution in how motor vehicle accident claims are handled across the province. It is our hope that most Albertans benefit from this new law.
The shift is designed to simplify claims, reduce legal costs, and lower premiums for good drivers. Perhaps even more importantly, it should provide more timely and equitable access to enhanced compensation and medical treatment for injured Albertans. But in the interim, though, how are you supposed to handle third-party insurance claims to get what you are owed?
Talk to the lawyers at Grover Law Firm to find out what your next steps are during a free consultation with us. The date when your accident occurred determines which rule of fault applies to your case. Laws may shift over time, but your right to stay informed and pursue your rightful compensation should not change.