Upcoming Changes to Alberta's Automobile Insurance System
Alberta’s UCP government has passed new legislation (known as Bill 47, the Automobile Insurance Act) that will significantly change how injury claims from motor vehicle accidents are handled in our province. While the details are not yet finalized and will continue to unfold over the coming months, here is what we know now the fundamental shift away from Alberta’s long-standing fault-based system and toward a “no-fault” model similar to the system currently used in Saskatchewan.
1. What does this mean for you? For nearly the entire history of automobile insurance in this province, Alberta has operated under what is known as a fault-based or tort-based system, where the at-fault driver is held responsible for financially compensating the victims of their accident. However, under the new no-fault system, the power is placed entirely in the hands of the insurance industry:
You will no longer have the legal right to sue the at-fault driver responsible for the injury or death which they caused in the vast majority of cases. Instead, you will be required to make a claim with your own insurance company for the injury, damages and loss which you have sustained.
Compensation will be standardized, meaning that compensation for injury, and benefits for medical treatment and income replacement will be subject to caps placed by the insurers and the government, regardless of what your actual losses may be.
Courts will no longer decide insurance disputes. Instead, your insurance company will decide how much you will receive in compensation and benefits, for how long, and when those benefits should be cut off, similar to the current WCB system. If you disagree with the insurer’s decision, that decision will be reviewed by an administrative tribunal, not the Courts. This new administrative tribunal is funded entirely by Alberta’s insurance companies, meaning the tribunal’s interests are directly aligned with insurers, not with accident victims.
Tribunal decisions are not subject to judicial oversight. The decisions of the insurer-funded administrative tribunal are not subject to Court oversight (except in very narrow circumstances), meaning that their decisions are final. In short, you lose your fundamental right to have your day in court, even if your doctors agree that the tribunal’s decision is wrong.
2. When will this impact you? Bill 47 has already been signed into law by Danielle Smith’s UCP government, and will come into effect on January 1, 2027. It is important to note, however, that these insurance changes will NOT impact existing claims, or accidents which occurred prior to January 1, 2027. That means that if you are an existing client of Rodin Law Firm, or are involved in a motor vehicle accident which occurs before January 1, 2027, your rights will remain as they currently are under our existing tort-based insurance system, where your ability to sue and receive proper compensation for your losses is protected.
3. Why is this happening? The UCP government has stated that the goal of this new insurance system is to reduce costs and stabilize insurance premiums. In other words, our government wants to make it easier for insurance companies to make money, even if that means severely limiting the rights of Albertans. Unfortunately, this is not a new story, and we have watched over the last several years as British Columbia has experimented with a similar no-fault scheme, to disastrous results. Albertans Against No-Fault Insurance has highlighted many of these stories on their website.
OUR COMMITMENT TO YOU. At Rodin Law Firm, we recognize that these developments are concerning to many - both our existing clients, and others. Our commitment is to monitor developments relating to the implementation and rollout of this no-fault scheme, keep you informed of how these developments will effect your rights and potential future claims, and advocate for the continued protection of Albertans’ rights to fair compensation and access to the Courts. We encourage you to stay informed and contact us with any questions or concerns about how these upcoming changes may affect your coverage, your rights, and your future claims.
WE’RE HERE TO HELP. If you or a family member has been injured in a motor vehicle accident, it is more important than ever to see legal advice as early as possible to ensure that your rights are protected under the existing system. Please feel free to contact us at (403) 437-7627 or by email, where one of our team would be happy to discuss your claim further.