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Alberta's auto insurance is undergoing a major transformation with the introduction of the "Care-First" model, set to launch in 2027, upon proclamation of the new Automobile Insurance Act. But what exactly is Care-First, and how will it impact you?
This blog post explores the details of this new system, designed to prioritize recovery and support for accident victims. We'll explore the two key benefit categories (comprehensive medical and recovery and income replacement) and how private insurers will deliver these benefits while preserving consumer choice.
Care-First aims to shift the focus from lengthy legal battles to meaningful recovery, providing access to the medical care, rehabilitation, and support needed for as long as it's required. While physical damage coverages remain unchanged, this new system promises a significant shift in how Albertans receive care after a car accident.
Let's unpack what Care-First means for you, including who is covered and what to expect from this new approach to auto insurance.
Alberta's "Care-First" auto insurance system, launching January 1, 2027, prioritizes enhanced health benefits and long-term affordability for Albertans. This no-fault system will provide improved medical, rehabilitation, and income support to all accident victims, regardless of fault, while holding at-fault drivers accountable through premiums.
Injured Albertans will have faster, more certain access to these benefits without needing to sue. Informed by feedback from over 16,Albertans and consultations with stakeholders, Care-First removes monetary and time limits on medical and rehabilitation benefits, though parameters will apply. Income replacement will be based on yearly income (up to $125,000 gross yearly income as of 2025) and payable until age 65, with options for additional coverage.
A new permanent impairment benefit will be available for life-altering injuries, and all benefit amounts will be indexed for inflation. By reducing litigation costs, Care-First aims to stabilize and reduce third-party liability premiums.
Your Alberta car insurance policy includes mandatory benefits and optional add-ons you can buy.
If you're hit by an uninsured driver or a hit-and-run driver, you may have access to additional benefits if you purchased a family protection endorsement. Otherwise, the Motor Vehicle Accident Claims Program may be available.
Alberta's changing auto insurance. Find the best rate for you. Compare online today!
The Care-First system, also known as the reform, was implemented to address the rising cost of auto insurance in Alberta, primarily driven by increasing bodily injury claim costs.
Without reform, these costs were projected to continue escalating, making insurance unaffordable for Albertans. At the same time, the auto insurance industry faced sustainability challenges, with premiums not covering the actual costs of coverage, leading to instability and insurers leaving the province. Independent experts were consulted to find solutions that would reduce costs and improve the long-term stability of Alberta's auto insurance system, ultimately leading to the development and implementation of Care-First.
Care-First offers significant changes to treatment and compensation compared to the current system. Notably, for serious and catastrophic injuries, Care-First removes the previous monetary and time limits on treatment, providing care for as long as there's a measurable benefit, and potentially for life in catastrophic cases, shifting from court battles to focus on medical recovery.
While pain and suffering compensation is removed in some cases, Care-First introduces permanent impairment lump sums and lifetime care for those with the most severe injuries, aiming for faster resolution and a focus on long-term well-being.
The following tables compare the current insurance system with the Care-First system, outlining differences in treatment, compensation, and timelines for injuries of varying severity.
| Aspect | Current system | Treatment |
|---|---|---|
| Treatment | Up to 21 pre-approved physiotherapy or chiropractic visits. Treatment is provided for as long as there is a 'measurable benefit'. | Treatment is provided for as long as there is a 'measurable benefit'. |
| Compensation | Pain and suffering damages capped at $6,061, plus out-of-pocket expenses. | No pain and suffering damages; out-of-pocket expenses claimable. |
| Timelines | Typically, the claim is resolved (treatment and compensation) within months. | Typically, claims will be resolved (treatment and compensation) within months. |
| Aspect | Care-First | Treatment |
|---|---|---|
| Treatment | Up to $50,000 for 2 years. If more treatment is required, you must sue the at-fault driver. | No maximum or time limit for treatment that provides a measurable benefit. |
| Compensation | Pain and suffering damages, as determined by the courts, loss of earning capacity, plus out-of-pocket expenses. | May be entitled to a permanent impairment lump sum (between $944 and $298,520), income replacement benefit, plus out-of-pocket expenses. |
| Timelines | Claims can take many years to be resolved | Claims would be resolved when maximum medical recovery is achieved. |
| Aspect | Care-First | Treatment |
|---|---|---|
| Treatment | Covers up to $50,000 for 2 years; extended treatment requires suing the at-fault driver. | No maximum or time limit for treatment that provides a measurable benefit. |
| Compensation | Court-determined pain and suffering damages, subject to a Supreme Court of Canada maximum. Also, loss of earning capacity and out-of-pocket expenses. | You may receive a permanent impairment lump sum (similar to the SCC limit, less legal costs), income replacement, and out-of-pocket expenses. |
| Timelines | Claims can take many years to be resolved | Could receive treatment and care for the rest of their life (if needed). |
Alberta's "Care-First" auto insurance reform, launching January 1, 2027, transitions the system to a no-fault model, prioritizing immediate care and income support for collision victims over lengthy legal disputes. The new Automobile Insurance Act aims to make insurance more affordable by reducing legal costs, establishing a framework for benefits and dispute resolution through an insurance-funded tribunal, with specific details to be outlined in future regulations.
Although Care-First aims to reduce litigation, Albertans will retain the right to sue in specific, serious cases. These circumstances include instances where the at-fault driver is convicted of certain criminal or Traffic Safety Act offenses, or when out-of-pocket expenses exceed insurance coverage.
The implementation of Alberta's Care-First system represents a significant shift in auto insurance, and the coming years will be crucial in shaping its success. As the government finalizes the regulations and the insurance industry prepares for the 2027 launch, the hope is that Care-First will deliver on its promises of lower premiums and enhanced care for collision victims.
Stay tuned for further updates as details emerge, and in the meantime, be sure to get a car insurance quote with ThinkInsure to ensure you're prepared for the changes ahead.
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Digital Content Writer
Kayla-Jane has been a content writer with ThinkInsure since 2020. She creates insurance content for auto, home, and commercial. Kayla-Jane has a diploma in Journalism.
| Categories | Industry NewsAuto |
|---|---|
| Tags | NewsAuto Coverage |
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