Alberta's no-fault auto insurance plan clashes with falling claim costs, lawyers warn
Data shows injury claims dropped sharply in 2025, undercutting the government's justification for stripping drivers' court rights.
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Alberta's move to no-fault auto insurance next year hinges on a justification that data now contradicts: the government claimed soaring injury claims required stripping drivers' right to sue, but insurance regulator AIRB reports claim costs fell sharply between 2024 and 2025.
Claim costs dropped to $1,398 across all coverages in 2025, down from $1,825 in 2024. The spike that drove the UCP's November 2024 announcement of the Care-First system was primarily the 2024 Calgary hail storm, which caused billions in damage—a weather event, not a pattern of injury litigation.
AIRB's reports, released last week, state 88 per cent of drivers will see premium reductions under Care-First starting January 1, 2027. The province projects savings of roughly $297 per private passenger vehicle annually, below the $400 per driver the government initially promised.
Lawyers argue the data exposes the real issue: controlling costs at the expense of injured Albertans. "Albertans are being told that their rights must be taken away to control costs—yet the AIRB's own data shows those costs are going down," said Laura Comfort, chair of the Alberta Civil Trial Lawyers Association, in a Monday statement. Under no-fault systems, both drivers receive compensation through insurance regardless of fault, but injured motorists lose the ability to sue in court for additional damages.
Personal injury lawyer Owen Lewis, a former ACTLA president from Grande Prairie, pointed to a deeper concern: insurers remain profitable even as claim costs fall. "The auto insurance companies were profitable last year, they'll continue to be profitable this year," Lewis told the Edmonton Journal. He also flagged the risk of inconsistent treatment across insurance companies, each with their own internal policies on compensation decisions.
Most Canadian no-fault systems operate with single public insurers that apply uniform rules. Alberta's model will have multiple private insurers setting their own standards, Lewis warned. "In this case, you're going to have however many dozen insurance companies with their own internal policies as to how they're going to deal with things, and it's just going to create a lot of chaos."
ACTLA is calling for the province to pause the transition. The UCP maintains the system will deliver faster, better care for collision victims.
How many Albertans will be denied compensation under the new system compared to the court-based model?
What happens if one insurer's compensation policy conflicts sharply with another's for the same injury type?
We'll update this story as answers emerge.
The facts
When does Alberta's no-fault auto insurance system take effect?
Alberta's Care-First no-fault system begins on January 1, 2027.
How much did average auto insurance claim costs change between 2024 and 2025?
Claim costs fell to $1,398 in 2025, down from $1,825 in 2024.
What percentage of Alberta drivers will see premium reductions under Care-First?
AIRB reports that 88 per cent of drivers will see premium reductions under Care-First starting January 1, 2027.
What is a key difference between Alberta's no-fault model and most other Canadian no-fault systems?
Alberta's model will have multiple private insurers each setting their own compensation standards, whereas most Canadian no-fault systems operate with single public insurers that apply uniform rules.
