The Albertan government and its residents do not seem to be seeing eye to eye when it comes to the newest insurance reforms proposed by the province.
The province announced a new auto insurance system that it argued would provide better and faster auto insurance services to Albertans while reducing premiums. The new care-focused system is intended to replace the current court-based system.
“Under the new system, if someone is injured in a collision, they’ll get the necessary care and benefits, whether they’re at fault or not, without the need to litigate. No more costly legal battles, no more drawn-out waits for care,” said Alberta Premier Danielle Smith. “Instead, Albertans who suffer serious injuries will be able to rely on treatment until they are recovered. Albertans who suffer catastrophic, life-changing injuries would be able to rely on treatment and care for the rest of their lives.”
The provincial government said it heard from 16,000 Albertans in online surveys, which drove the changes to the insurance policies. The Albertan government said residents will see savings of up to $400 annually.
According to the survey’s responses, 95% of Albertans agreed that bad drivers should pay more for their insurance. Eight in ten said that they want to pay the lowest possible cost for their insurance, while 73% believed it was important to be able to sue at-fault drivers. However, more than six in ten said they would not need the right to sue if their insurance company supported their needs.
“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable,” said Smith. “When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”
Smith posted the entire press conference to X. While the post only had half as many comments as likes, a large portion of them were negative.
One of the most liked comments highlighted that Albertans pay the highest auto insurance premiums in the country. Based on the numbers provided, a $400 yearly saving would not change the province’s rank.
“Not acceptable. We have the highest rates in the country, and yet you give the go-ahead to raise premiums another 7.5% per year over two years with the hopes that these companies will suddenly become cheaper because of no-fault insurance? Your math is adding up like Trudeaus; the debt will pay itself off,” said one user in a separate post.
Alberta’s Finance Minister Nate Horner said that classifying the new insurance as no-fault is misleading.
“Some will categorize this care-first system as no fault. I really think that’s a misleading label and just not right,” said Finance Minister Nate Horner. “Under this model, fault still matters. Bad drivers will continue to pay more in premiums. Drivers will be held accountable for their actions.”
Despite the negative reaction online, a spokesperson for the Ministry of Finance told True North that asserting people were reacting negatively was “premature.”
“There are parties with a vested interest in ensuring litigation costs and the status-quo of poor benefits for expensive costs remain in place, and they are spreading misinformation on the changes. These changes will provide better, faster, and cheaper auto insurance to Albertans when implemented in January 2027, and we look forward to ensuring the 3.4 million drivers in the province save money,” said the spokesperson.
The spokesperson added that for every dollar taken by insurance companies, they pay $1.17 in settlements, with some paying as much as $1.40.
“Most will continue to lose money under the increased cap, leading to more leaving the province between now and January 2027. We are taking action to protect Albertans from rampant premium increases until they can see savings under the care-first system,” added the spokesperson.
The new system is not set to be fully implemented until Jan. 2027. The new system will require legislation to be introduced in the spring of 2025.
In the interim, starting Jan. 2025, the good driver rate cap will be increased to 7.5%. It is currently 3.7%.
“We know an increase in the rate cap is not ideal for Albertans. This wasn’t something we wanted to do. It’s clear that auto insurance companies are not blameless in this situation either. But the current situation is not about profitability. It’s about viability,” said Horner. “Many companies are losing millions under the current Cap system, and we have chosen to limit the cap as much as possible in the face of escalating costs. Two insurers have already decided to leave our market, and others could potentially follow without some adjustment to the cap.”
