NO-FAULT AUTOMOBILE INSURANCE: What This Means for You



November 27 2024

On November 21, 2024, the Government of Alberta announced that it will be implementing a no-fault automobile insurance system on January 1, 2027.

No-Fault Auto Insurance Explained

The government’s recently announced “Care First” auto insurance system is a no-fault system privately delivered by insurance companies. This will mean that someone injured in a car accident will have to look to their own insurance company for compensation, rather than being able to sue the at-fault driver. Other provinces, like British Columbia, have enacted no-fault systems, and the public reception in those provinces has generally been very poor. Not surprisingly, Alberta polls show that the vast majority of Albertans are not in favour of a no-fault system.

Implications of No-Fault Auto Insurance

There will be many far-reaching consequences of no-fault auto insurance. Some of the major implications include:

  1. No-fault auto insurance will limit the rights of Albertans to seek fair compensation for their injuries;
  2. There will be limited checks and balances in place to hold insurance companies accountable;
  3. Injured Albertans will be forced to navigate a system similar to Alberta’s current WCB process where the insurance companies will decide what benefits and how much you are entitled to;
  4. It is unlikely that Albertans will actually save any money on insurance premiums.

While the Government has called this a “care-first model” and promised that consumers will eventually see premiums savings, insurers will be allowed to increase premiums for “good drivers” by 7.5% annually starting in January of 2025. In other provinces where no-fault systems were implemented, any premium savings to consumers were short-lived. It is insurance companies that will benefit from this system, not Albertans.

Transition to No-Fault Auto System

Until the no-fault system comes into effect (which the government has stated would be January 1, 2027), Alberta will continue to operate under its current system of insurance. This system allows injured parties to seek compensation from an at-fault driver’s insurance company for damages including: pain and suffering, lost wages, loss of housekeeping capacity, the cost of future care, and out of pocket expenses.

Current claims and any new claims that arise between now and when the new no-fault system comes into effect will NOT be impacted. That said, all motor vehicle claims arising after the implementation of this new system will have to go through the no-fault system.

Next Steps

Lawyers in Alberta have been working with Government agencies and others for years to highlight the issues with a no-fault system and to protect the rights of Albertans. CAM LLP will continue to advocate for the rights of Albertans and injured victims. But there is still more that can be done before the new no-fault system comes into effect.

We are encouraging all Albertans to reach out to their MLAs and other Government of Alberta officials, including Minister of Treasury Board and Finance, Nate Horner, to voice their concerns with this system. These officials can be contacted using the links below:

To stay informed on this topic, we also encourage you to visit FAIRAB.ca and follow FAIR AB on Facebook and Instagram.

CAM LLP IS HERE TO HELP

CAM LLP has a team of dedicated lawyers committed to helping our clients navigate the insurance system and receive fair compensation for injuries suffered in a car accident. Rest assured that if you have a current claim with CAM LLP, it will not be affected.

CAM LLP is also committed to helping our clients and all Albertans understand the changes that will come with a no-fault auto insurance system. CAM LLP will continue advocating against this system in order to protect the future rights of all Albertans.

If you have any questions about no fault or your legal rights, and if you’ve been injured in a motor vehicle accident, the CAM LLP team is here to help. Contact us today.