Alberta auto insurance savings bigger than expected under new Care-First system

Alberta's auto insurance rates will fall more sharply than the province estimated earlier this year when the Care-First system launches January 1, according to two reports released this week by the Automobile Insurance Rate Board.

The AIRB found owners of passenger vehicles will save an average 13.7 per cent on premiums under Care-First, roughly $297 per vehicle. That beats the province's initial March estimate of $259 in average savings. The analysis is based on actual insurer rate filings approved for the coming year.

Savings vary sharply by driver age and gender. Young male drivers face a projected 30 per cent reduction in premiums, while young female drivers will see a 27.6 per cent decrease. Motorcyclists, however, face a different picture — rates are expected to double.

Care-First replaces Alberta's existing tort-based insurance system with a no-fault model similar to those in British Columbia, Saskatchewan and Manitoba. Under the new system, medical benefits are unlimited as long as required, and income replacement is included. Insurers cannot increase rates by more than 5 per cent across their overall customer base, and individual premiums for average drivers are capped at a 10 per cent increase at renewal.

Heather Mack, manager of education and engagement with the AIRB, cautioned that savings are not guaranteed for every driver. "It's not a guarantee of savings. A lot of insurance is very personalized, so it will depend on how you behave on the road," Mack said. She noted the shift in coverage structure: "Today, if you're in a collision, you have about $50,000 coverage for your medical and your rehab, and limited income replacement benefits if you want. If you need more than that, you have to go to court, and that takes time and a lot of money. Now under Care-First, you will instead have unlimited — as long as it is required — medical benefits, income replacement, things like that."

The new system has faced criticism from some legal and safety advocates. Karamveer Lalh, board secretary for the Alberta Civil Trial Lawyers Association, said there are concerns that settling injury claims outside of court could limit Albertans' ability to properly dispute them. Albertans can still sue in special cases under the new system, and payouts will be based on standardized guidelines. An Alberta Automobile Care-First Tribunal will be established to resolve benefits disputes between drivers and insurance companies.