Big changes are coming to how Albertans are protected on the road. The Alberta government has introduced a new auto insurance model called Care-First, set to take effect on January 1, 2027.
As your insurance broker, we want to ensure you understand how this new “no-fault” approach works, how it differs from the current system, and what it means for your coverage.
What is Care-First?
Care-First is a shift away from the traditional “tort” (lawsuit-based) system. Instead of waiting for a court to determine who was at fault before receiving full compensation for your injuries, you will work directly with your own insurance company to access benefits immediately.
The focus of this model is recovery, not litigation. While the way injuries are handled is changing, coverage for physical damage to your vehicle remains the same.
The Major Upgrades: Current vs. Care-First
The most significant part of this reform is the massive increase in the benefits available to you. Under Care-First, Alberta will move from some of the most limited accident benefits in Canada to some of the most generous.
| Benefit Type | Current System (Pre-2027) | Care-First System (Post-Jan 1, 2027) |
| Medical & Rehab | Capped at $50,000 (usually for 2 years). | Unlimited for all reasonable and necessary expenses (potentially for life). |
| Income Replacement | Max $600/week for up to 2 years. | 90% of net income (up to $125,000 gross annual income) payable until age 65. |
| Pain & Suffering | Court-based lawsuits (often taking years). | Replaced by a Permanent Impairment lump sum payment ($944 to ~$298,520). |
| Death Benefits | ~$10,000 for a spouse. | Up to $600,000 for a spouse (based on income). |
Broker Note: These enhanced benefits apply regardless of who caused the accident. This ensures that even if you are at fault, you and your passengers have access to world-class medical care and financial stability.
Your Right to Sue: The Limited Exceptions
While the Care-First model is designed to eliminate the need for most lawsuits, the “Right to Sue” is not entirely gone. It is now reserved for specific, serious circumstances:
- Serious Offences: You may still pursue legal action if the at-fault driver is convicted of certain offences under the Criminal Code (e.g., impaired driving, street racing) or the Traffic Safety Act.
- Excess Expenses: If your out-of-pocket medical or income losses exceed the (new, much higher) policy limits and are medically necessary, you may be able to sue for the difference.
- Third Parties: Lawsuits remain possible against parties outside the auto insurance system, such as automobile manufacturers or municipalities (for road design issues).
A Fair Way to Resolve Disputes
To ensure insurers are acting fairly, the government is establishing the Alberta Automobile Care-First Tribunal.
If you disagree with your insurer’s decision regarding your benefits, you won’t need to hire an expensive lawyer for a multi-year court battle. Instead, you can take your case to this independent tribunal, which is designed to provide faster, more accessible, and binding resolutions.
Key Dates and Next Steps
- Effective Date: January 1, 2027.
- Transition: If you have an accident before Jan 1, 2027, your claim will stay under the old system, even if the legal process continues into 2027.
- Premiums: One of the main goals of reducing legal costs (which currently account for about 30% of injury claim costs) is to stabilize and potentially lower insurance premiums for all Albertans.
We are here to help you navigate this transition. As we get closer to 2027, we will provide updates as needed.
Note: The above may be subject to change prior to implementation of January 1, 2027