No-Fault Auto Insurance in Alberta

January 8 2021

Alberta’s advisory committee on insurance reform has recommended that the province change its auto insurance system to a no-fault system.  No-fault auto insurance is common in jurisdictions where government plays a larger role in people’s lives such as British Columbia and Saskatchewan. This system is inconsistent with the values of personal responsibility, self-determination, and fairness that Albertans hold dear. 

Experience in the U.S. and other provinces has also shown that no-fault doesn’t reduce premiums but leads to higher costs and fewer protections and civil rights for Albertans.  A no-fault insurance means that if you’re hurt or your vehicle is damaged in an accident, your own insurance company will pay for some of your losses, no matter who caused the accident. The other person’s losses will be covered by their insurance company. This system eliminates the concept of an “at-fault” driver and the ability of Albertans to exercise their basic civil right to access the courts. A poll last Spring found that only 20% of Albertans support a move to a no-fault system and that 61% of Albertans want to maintain at-fault insurance. 

Contrary to a no-fault system where insurers have more control than the courts, 69% of Albertans said they believed a judge and the court system was the most fair and trusted arbiter to determine what is fair compensation for an injury victim.

Why Should You Say No to No-Fault?

  • When first enacted – in Ontario and elsewhere – no-fault auto insurance was considered a way to combat high premium costs. However, studies have shown private, these systems are consistently among the highest-cost auto insurance jurisdictions.
  •  No-fault treats those who cause accidents the same as those not at-fault. There is less accountability and personal responsibility for bad or negligent drivers. Drivers have fewer reasons to behave safely on the roads in a this system.
  •  No-fault favours a one size fits all approach to injury treatment and care. No-fault is opposed by most medical professionals because it does not support proper medical treatment of injuries.
  •  Our government was elected to reduce regulations and protect the rights of Albertans. A pure, no-fault auto insurance system adds layers of regulations and new red tape just to pad insurance industry profits at the expense of Alberta consumers.
  •  A no-fault system means insurance disputes will no longer be settled by the courts. Instead, a new government bureaucracy will be created much like the Workers Compensation Board (WCB). Albertans do not want another WCB for auto insurance run by private insurers.
  •  A no-fault system will result in further job losses for Albertans working in insurance, legal, and health care professions. Albertans shouldn’t have to sacrifice more jobs for a no-fault system that won’t save consumers money and only benefits insurance companies.

What Can You Do?

  1. Oppose a no-fault insurance system and encourage your MLA to stand up for personal responsibility and oppose a no-fault insurance system that won’t reduce premiums for consumers and only serves to create a new bureaucracy and add more red tape to Alberta’s insurance system. 
  2. Ask your MLA to allow a period of evaluation for reforms announced in Bill 41 to occur.  

The reforms in Bill 41 are substantial and will already reduce costs and increase profits in the insurance industry by hundreds of millions of dollars each year. A period of evaluation should occur before more reforms take place to allow the package of initiatives announced in Bill 41 to take effect in the industry.

The government plans to make a decision by the spring. In the meantime, they want to hear what Albertans think. Call the Finance Minister’s office at: 1-780-415-4855 or email: [email protected]

If you have any questions about now a no-fault system will affect your motor vehicle accident claim, please contact the experienced lawyers at CAM LLP.