Understanding Alberta’s auto insurance reforms

Big changes, better outcomes for drivers 

What’s happening now?

Challenges for insurers: A 3.7% cap on premium increases forces insurers to absorb rising auto litigation costs and natural disaster impacts.

Challenges for consumers: Limited options and coverage availability as insurers seek to limit their exposure.

What’s changing?

Moving to a privately-delivered, care-first system to go live by January 1, 2027

• Compensation will be provided directly by insurers, based on standardized government rates.
• Removal of the need to sue which will reduce costly and time-consuming lawsuits, leading to quicker care for accident victims. 
• Care-first is intended to lower premiums in the long-term by removing litigation in some incidents and getting care to the person.

Premium rate adjustments 

• Good drivers: Premium rate increases capped at 7.5% annually from previously being capped at 3.7%. This breaks down into a 5% rate cap increase and 2.5% for catastrophic losses. The need for the rate increase is due to the rising auto litigation costs and natural disaster impacts.
• Fault matters: By removing the grid system, at–fault drivers will be held accountable and good drivers will no longer subsidize poor drivers.

What it means for you

Immediate impact 

• Insurers may still limit certain coverage options until the reforms take full effect. 
• Drivers with strong records will see more predictable premium increases under the new cap. 
• A privately-delivered, care-first base model still leaves insurance choices in the hands of Albertans. 

Long-term benefits

Expected savings for consumers due to several factors aimed at reducing overall costs in the system: 

• Switching to a privately-delivered, care-first insurance system cuts lawsuits, reducing legal fees and litigation costs that often drive up premiums. 
• The new system prioritizes care over costly settlements, stabilizing claims and potentially lowering premiums for policyholders.
• The new system compensates victims through their own insurer at standardized rates, reducing delays and costs, which could lower premiums. 

When do reforms take effect?

Changes are being phased in, with privately-delivered, care-first insurance and premium adjustments rolling out over the next few years. Full implementation is expected by 2027. 

What should you do now?

1. Speak with your Westland broker about current options and potential changes. 
2. Stay informed—more updates will follow as reforms take shape. 

These reforms aim to create a fairer, more affordable auto insurance system for all Alberta drivers. The goal is to address causes of existing cost pressures and create a more sustainable auto insurance system in the province.

At Westland Insurance, our expert brokers are here to help you navigate these changes with confidence. With our province-wide scale and deep understanding of the new system, we’re committed to finding the best solutions to ensure your coverage remains stable and tailored to your needs—whether you’re on the road today or planning for the future. 

Reach out to one of Westland’s local insurance experts for help reviewing your current coverage, or to get details on a new policy. We are ready and waiting to help you get coverage that goes further!