Province to introduce new automobile insurance system

By Al Beeber - Lethbridge Herald on November 22, 2024.

LETHBRIDGE HERALDabeeber@lethbridgeherald.com

The provincial government is driving toward instituting a new automobile insurance system on Jan. 1, 2027.

The province says it is not introducing so-called ‘no fault’ insurance and that lousy drivers will still be held accountable through higher premiums.

On Thursday, the province announced it is introducing “a new privately delivered, care-focused” insurance system.

The province says that insurance premiums aren’t affordable and that people injured in collisions don’t get the timely medical care and income support they need.

“When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year,” says the government.

Under the new system, Albertans who receive catastrophic injuries will get treatment and care for their rest of their lives while those who suffer serious injuries will be treated until they are fully recovered.

The government says presently Albertans injured in a collision will wait months for a claim to be resolved and years for claims involving more serious injuries to be addressed.

“These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act,” says the government.

Legislation will be needed to be introduced in the spring of next year. To reconfigure the insurance policies of 3.4 million Albertans, insurers will need time to create and implement the new system, hence the January 2027 target date.

Meanwhile, starting in January of 2025, the good driver rate cap will be adjusted to a 7.5 per cent hike due to high legal costs, higher repair costs and natural disaster costs.

“This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta,” says the province.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province,” said MLA for Lethbridge East and Minister of Affordability and Utilities Nathan Neudorf in an afternoon release.

President of the Treasury Board and Minister of Finance Nate Horner added “high auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

However, Court Ellingson, NDP Shadow Minister for Finance, says the UCP’s proposed insurance system will do just the opposite in terms of affordability.

“Albertans are already paying some of the highest car insurance rates in the country. Instead of stepping up and finding ways to give people real financial relief, the UCP is letting rates climb even higher-exactly when Albertans can least afford it,” said Ellingson in a statement.

Ellingson says rate increases for good drivers are capped at 3.7 per cent, while the UCP intends to raise this to 7.5 per cent, effectively doubling the allowable rate increase.