Alberta is proposing a shift in its auto insurance system with the introduction of the Automobile Insurance and Care-First Benefits Act, according to Canadian Lawyer.
The new legislation, if passed, aims to streamline the claims process, reduce the need for costly litigation, and ultimately lower auto insurance premiums for the province’s residents.
The proposed "Care-First" model aims to replace the current system, which relies heavily on legal battles, with a framework that prioritizes providing injured individuals with faster access to benefits, including medical care, rehabilitation, and income support.
Alberta Finance Minister Nate Horner explained that the goal of the reform is to ensure that those injured in vehicular accidents can prioritize their recovery.
“Care-First is a term we use intentionally, because Albertans who are injured in a collision truly need their care and well-being to come first,” Horner said in a government release.
Under the new system, Alberta plans to restrict lawsuits, permitting them only in cases where an at-fault driver is convicted of a serious offence or when an injured party needs to recover out-of-pocket expenses beyond the limits of their insurance coverage, the report said.
The government argues that limiting legal involvement will help reduce the overall cost of claims, leading to lower premiums for drivers.
Aaron Sutherland, vice president of Pacific and Western for the Insurance Bureau of Canada (IBC), cautioned that the success of the reform depends on the extent to which the government restricts litigation.
“The more lawyers are involved in Alberta’s Care-First system, the less likely that drivers will save,” Sutherland said in an IBC statement. His comments highlight concerns that excessive legal involvement could undermine the cost-saving potential of the new system.
The proposed care-first system would offer a range of benefits, including coverage for medical expenses, rehabilitation, daily living assistance, and, in some cases, long-term care for individuals with severe injuries. Additionally, it would provide permanent impairment benefits for those with lasting disabilities and death benefits for the families of those who pass away as a result of an accident.
Insurers have expressed support for the proposed reforms but emphasized the importance of maintaining an efficient system to ensure cost savings are passed on to consumers, according to the report.
“Alberta’s insurers look forward to working with the provincial government to ensure these reforms enhance the care provided to those injured in collisions while ensuring premium affordability over the long term,” Sutherland said.
The government has outlined a two-year implementation period for the Care-First system, with an estimated 3.4 million new auto insurance policies needing to be developed.
Alberta also plans to consult with healthcare and insurance experts to fine-tune the operational aspects of the system. The full implementation is expected by January 1, 2027.
